by Pete Mazzaccaro
John Thain, a Rita’s Water Ice franchisee who planned to open a new location at Chestnut Hill Plaza in the former home of TLA Video, said he has canceled the project after Trolley Car Diner owner Ken Weinstein challenged his right to operate the store based on a decade’s old restrictive covenant.
“I have to pull the plug,” he said. “The good news is I’m not going out of business because of this, but I’d rather have spent the money [in architects and legal fees] on a charity.”
Thain, a former Chestnut Hill resident, had secured the endorsement of both the Chestnut Hill Community Association and the Chestnut Hill Business Association in December of last year. Neighbors of the property had signed off on an exemption to a restrictive covenant that expressly forbade the leasing of any part of the property at 7630 Germantown Ave. to a fast food franchise.
The CHCA’s Land Use Planning and Zoning committee reviewed that covenant and decided Rita’s deserved an exemption because it was only serving water ice and after Thain agreed to a number of provisions to keep the lot and nearby property quiet and clean.
Long after that, however, Weinstein informed Thain that he planned to pursue legal action against Thain based on a restrictive covenant. Although nearby neighbors had approved the Rita’s opening, the covenant granted legal standing to any resident or business within 750 feet of the property.
“Every legal expert I talked to said we could definitely overturn that covenant,” Thain said. “But it’s a matter of timing. It might take until June or July. I think Weinstein knew this and he’s getting the result he expected.”
Weinstein was clear that he never actually filed anything. He admitted to making the threat but said that was the extent of any “legal actions” on his part. He also said that he has received resounding encouragement and support from people who believed, as he did, that a seasonal chain business was not good for the neighborhood.
Weinstein, however, said he did not consider news that Thain was withdrawing his plans a victory in any way.
“We won’t have a victory until we find a long-term, suitable tenant for that space,” he said. “We didn’t need a tenant that would have been closed four months out of every year.”
Weinstein dismissed charges that he only threatened legal action because he was concerned the Rita’s would offer stiff competition to his ice cream business.
“I know there’s plenty of room in the neighborhood for multiple restaurants and ice cream businesses,” he said. “The thing is I was the only person within 750 feet who could challenge Rita’s.”
Thain said he believed that one good thing to come out of the situation is that the CHCA and CHBA will reconsider restrictive covenants up and down Germantown Avenue and revue any existing ones to see if they still make sense.
“I though the CHCA and CHBA did a remarkable job,” he said. “People have said that it’s tough to do business in Chestnut Hill, but I think those organizations, especially the LUPZ, put a lot of hard work and thought into the process.”
Thain said that, even though the failed bid to open in Chestnut Hill Plaza cost him $10,000, what he’s mostly disappointed about is losing the opportunity to open a new franchise this year. He has the rights to Rita’s franchises in Northwest Philadelphia and believes there’s a good opportunity in Chestnut Hill.
“I’ve done the research,” he said. “I have identified a market here. If another space becomes available I will open. Ken might feel he staved off the competition, but it’s only temporary.”