Lawsuit claims T-Mobile ‘betrayed’ store owners in wake of Sprint merger

Plaintiffs allege T-Mobile used a ‘squeeze and buy’ strategy to drive them out of business
Published: Aug. 23, 2023 at 3:58 PM CDT
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(InvestigateTV) — A group of mostly minority-owned businesses has filed a class-action lawsuit alleging T-Mobile falsely claimed “hundreds of stores” would open after its merger with Sprint, while also failing to disclose its plans to take over or close existing stores “without just and fair compensation.”

Jeanne Liriano owned an electronics store that sold cell phones in her neighborhood for 24 years.

“There wasn’t places like that, there wasn’t a place where Hispanic people could go and make a payment in Spanish,” Liriano said. “You connect with them. They bring their family members to you and it’s like an extended family.”

Her store eventually started selling solely for T-Mobile, after Liriano spent hundreds of thousands of dollars to revamp her store into a franchise. When T-Mobile and Sprint merged in 2018, Liriano said the company told her and other owners not to worry.

She claimed T-Mobile gave no indication that her store would be closed, instead she was led to believe her business would grow with the merger.

Business owner Robert Rodriguez experienced the same thing.

“So they basically promised they’ll keep all of the stores and investing in the industry and keep growing,” Rodriguez said. “But turns out that’s not really what happened. We ended up getting hurt.”

Rodriguez, Liriano and dozens of other business owners claim in their lawsuit that T-Mobile “played a dirty game of ‘squeeze and buy,’” effectively buying profitable stores for little to nothing.

The 26-page lawsuit claims “T-Mobile knew the small business owners’ agreements lasted until June 2024, but T-Mobile conspired with its master dealer, Arch Telecom, to create an earlier and artificial termination date. And over a period of months…T-Mobile allowed Arch Telecom to contact the Plaintiffs to work them over”.

The business owners’ complaint also says that Arch Telecom “offered to buy their viable and profitable stores for little to nothing… depriving them of their livelihood.”

InvestigateTV reached out to both Arch Telecom and T-Mobile for comment – neither have responded.

According to the U.S. Government Accountability Office’s (GAO) analysis of Federal Trade Commission (FTC) data, there were about 5,900 franchise-related complaints between 2018 and 2022. However, the GAO said there are likely many franchise owners who have not filed a complaint because they didn’t know they could.

Violations or concerns about franchise operations can be reported to the FTC here.