A financially troubled Roseville developer and his brother operated 10 unauthorized restaurants under the banner of T.G.I. Friday's for nine months, dispensing trademark cocktails and food while owing millions in franchise fees, the restaurant company has charged in court documents.

Abe Alizadeh, a real estate developer and restaurant franchisee, along with his brother, Mike Alizadeh, formed four different companies between 1997 and 2006 to run the restaurants, but failed to pay $4.5 million in monthly franchise fees, T.G.I. Friday's claimed in a January federal lawsuit.

The T.G.I. Friday's restaurants owned by the brothers – including all four Sacramento area stores – closed under court order Sept. 18, leaving employees stranded and ending a decades-long local presence of the popular bar and restaurant that put potato skins on the map.

The dispute with the Texas-based restaurant chain is one of dozens of court actions mounted against Abe Alizadeh, who had bankrolled his burgeoning real estate empire with the 70 Jack in the Box restaurants he owned throughout Northern California.

Citing the economy, Abe Alizadeh filed for bankruptcy protection for his flagship commercial property development business, Kobra Properties, in 2008, and for his Jack in the Box restaurant business, Kobra Associates, in September. The Roseville developer owes at least $316 million, according to court documents, but it could take months to tally his widespread business debt.

In the T.G.I. Friday's case, the corporation said it terminated franchise agreements with the two brothers in December 2008 because they had failed since 2007 to pay fees – now up to $5 million – according to court documents. The two were ordered to stop using the company's logos and all other services and products identified with the name. One of 11 restaurants operated by the Alizadehs closed in April 2008 without the company's consent, court records show.

"By virtue of termination of the Franchise Agreements, Friday's is unable to control the nature and quality of the goods and services that Defendants provide at the Restaurants," T.G.I. Friday's said in court documents.

Because the brothers failed to comply voluntarily at the remaining 10 stores, the company sued in U.S. District Court in Texas in January.

In August, T.G.I. Friday's won a preliminary injunction against the Alizadehs and they were ordered by the court to stop operating the restaurants as T.G.I. Friday's franchises.

"TGIF has established a substantial likelihood that defendants' use is unauthorized," U.S. District Court Chief Judge Sidney Fitzwater ruled.

The Alizadehs at the time said they had a prospective purchaser who would pay $5 million for the 10 restaurants.

A representative for the restaurant company said this week it is premature to talk about the fate of the restaurants or any possible future franchises in the region.

Attorneys for the company did not return phone calls. An attorney representing Alizadeh in the T.G.I. Friday's case declined to comment.

In court records, the Alizadehs admit the franchise agreement calls for them to pay monthly "royalty fees" equal to four percent of gross sales, and that they haven't paid them and haven't returned company property. But they deny wrongdoing or owing the money.

The brothers argued in court documents that the company cut them out of food-purchasing and distribution cooperatives it makes available to other franchisees, which set them back an estimated $6 million. Because of the loss, they were unable to pay the franchise fees, they claimed.

In granting the preliminary injunction, the judge swept aside their arguments, noting that the brothers had voluntarily opted out of T.G.I. Friday's food-purchasing system.

"It is highly unlikely that defendants can prevail on these claims," Fitzwater said.

A consumer law attorney said how soon the restaurants could re-open depends on the legal proceedings surrounding Alizadeh.

"The question is, what is the court going to do?" said Jonathan G. Stein, an Elk Grove attorney.

Whether the brothers owned the property where the franchises operated will also complicate the equation, Stein said. Property records indicate the Alizadehs appear to own several of the properties.

If the brothers acted voluntarily, a transfer to new franchisees could happen in as little as 90 days, Stein said, or it could be as much as a year of protracted legal arguments.

The proceedings are likely to be complicated.

One of the Alizadehs' companies, Great Northwest Restaurants Inc., which owns a T.G.I. Friday's in Washington, has been sued by Bank of America for defaulting on a nearly $14.7 million loan, according to court documents.

Finding willing franchisees for T.G.I. Friday's-type restaurants in this economic environment could be a challenge, said Garrick Brown, vice president of research at Colliers International. "The sit-down casual category has been hammered," he said.

Because of the economy, it would be unlikely for T.G.I. Friday's to take over the restaurants, he said. Restaurant companies are leaning more toward franchising than company-owned stores, Brown said.

Call The Bee's M.S. Enkoji, (916) 321-1106.