Written by Marcos Camargo
In an emotionally charged meeting on Monday, June 29, the Springdale Town Council voted unanimously to accept a settlement agreement ending a nine-year legal battle with Izzy Poco, LLC. Izzy Poco filed suit against the town and several of its elected officials after the corporation’s application for a business license to open a franchise Subway sandwich shop was rejected. The suit challenged a Springdale town ordinance banning “formula restaurants” that was meant to preserve the community’s village atmosphere. Earlier this year, a federal ruling dismissed Izzy Poco’s suit without prejudice because the Springdale Town Council rejected the application due to incorrectly filed paperwork. However, the federal ruling also recognized that Izzy Poco could still pursue litigation challenging the constitutionality of the ordinance.
Izzy Poco chose to move forward with the case, arguing that the ordinance violated the commerce clause of the U.S. Constitution. Springdale officials, under pressure from their insurance carrier to settle, acquiesced to the demands of Izzy Poco. The resulting settlement placed no liability on either party but requires the town to pay $787,500 to Izzy Poco. The settlement also requires that a business license be issued to Zion Sandwiches, LLC, a company owned by an immediate family member of some of Izzy Poco’s owners, as well as an agreement by the town to repeal the prohibition on formula restaurants. Under the settlement terms, Izzy Poco agrees to comply with other Springdale ordinances including regulations on signage, building codes, and health regulations.
Several residents expressed deep disappointment with the settlement.
“You’ve rolled over,” said Springdale resident Louise Excell. “You’ve given away this town… And if your attorneys have recommended that you approve this settlement, then you not only need a new law firm, but you need a new insurance company. And if you approve this, I would respectfully ask you to submit your resignation.”
Council member Adrian Player rebuffed Excell’s request.
“I am not prepared to resign,” said Player. “I find that comment offensive. I will probably run again, and if you don’t like my decisions, don’t vote for me.”
Mayor Stan Smith described his time as mayor as “not fun.” He said the decision to settle with Izzy Poco was one the council did not take lightly.
Jack Fotheringham, one of Izzy Poco’s owners, said the settlement corrects an unjust law.
“What you’ve got to realize is this whole ordinance was started after my son put an application in,” said Fotheringham. “What [the town] did was totally illegal. But they knew it was coming. There was no way to win this. In fact, their lawyers told them, ‘Don’t do this.’”
Fotheringham went on to explain that banning formula restaurants does nothing for the town because in the end, it’s all about the money, and a franchise ban puts a restriction on making money.
“This small town atmosphere that they talk about, that’s a nice catch phrase,” said Fotheringham. “You notice the Subway signs have been up for how many years now? Six years, and [supporters of the ordinance] said nobody’s going to come here because nobody wants [a franchise restaurant]. Nobody wants it? Has it changed the town any since the signs have been up? … This is a tourist town, period. The town claims they come here… for Springdale. No, they come here for the park.”
Fotheringham also spoke about the impact the nine-year legal fight has had on his family.
“My son opened this so he could raise his family here,” said Fotheringham. “I was raised here. He was raised here. But my grandkids will not be raised here. Thanks to this. That’s what [the town] got; they chased my son out of town.”
The council has not yet officially rescinded the ordinance but will hold a public comment session and vote on the issue July 7. Statements by both the council and the town’s attorney suggest that the repeal has been all but officially decided.
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– Town of Springdale plans to repeal ordinance prohibiting ‘formula’ restaurants
– Lawsuit over Springdale Subway franchise dismissed, redress still an option
