Rapid Realty: Franchisees, attorney conspired in “malicious scheme” to destroy brokerage

UPDATED, Feb. 14, 10:30 a.m.: Rapid Realty is firing back against the attorney and several franchisee owners who accused the firm of selling them a false bill of goods.

Rapid filed a lawsuit accusing attorney Kendrick Harris and three franchise owners of a “malicious scheme” to “destroy the existing and future business prospects” for Rapid and its principals, according to court documents filed in Manhattan Supreme Court Tuesday.

Harris, of the law firm Harris Law Group, has been working with a handful of franchisee owners to file a class-action-seeking lawsuit against Rapid Realty. They claim the company set franchisees up with a lender who provided high-cost loans to fund the purchase of their franchises, but the money meant to build out their offices went into the pockets of Rapid’s principals, instead of the businesses.

Rapid principals Anthony Lolli and Carlos Angelucci, however, claim that Harris had first entered their “inner circle” and served as counsel to their company, then tried unsuccessfully to get hired as Rapid’s general counsel – a role that would have him referred to franchisees for legal services.

“Rebuffed, Harris decided that he could profit from turning on plaintiffs and began to try to form a ‘mutiny’ among other franchisees,” their lawsuit claims.

Harris, however, said it was Rapid Realty that reached out to him to offer a job when he was already representing the franchisees.

“These are all lies. I rebut everything,” he told The Real Deal. “They are trying to interfere with my representation of my clients, simply because they lose on the facts of the case.”

“Nothing about what they’re saying changes the fact that they sold franchises with an expired registration and without providing the proper disclosures,” he added.

One of the main points of the case is the fact that Rapid’s registration with the state Attorney General’s office to sell franchises expired in 2016 – a fact the company concedes.

Rapid said it offered to let franchise owners who purchased their businesses while the registration was expired to get out of their agreements, but that Harris pushed them to file a lawsuit because there was more money in a settlement.

He told one franchise owner that Rapid was “going down like the Titanic” and the best hope was to “get off the boat” as soon as possible, Rapid’s lawsuit claims.

“Harris used high pressure tactics to the effect that, if franchisees did not join the planned lawsuit, they would be left with nothing since his lawsuit would cause a dramatic downturn in their business,” the lawsuit reads.

The lawsuit also goes after a trio of franchise owners, who Rapid claims made defamatory comments about the company on social media. Two of the owners, they claim, vandalized their office at 373 Franklin Avenue in Brooklyn and spray painted the walls with the line “THE HEART OF THE ‘STEAL,’” a reference to Lolli’s book, “The Heart of the Deal.”

Rapid is seeking unspecified damages to be determined at trial.