Frisch’s Legal Woes Grow Amid Unpaid Invoices Dispute
- DM Monticello
- Jul 3
- 7 min read
How Small Businesses and Freelancers Can Protect Against Invoice Scams
While this article focuses on Denver’s warning about fake text messages involving parking fines, the broader issue of invoice-related scams affects businesses of all sizes. Whether you’re a local entrepreneur, freelancer, or small agency, being targeted by fake invoice schemes is a real and growing risk.
Here’s how to safeguard your operations, reputation, and revenue using smart invoicing practices—much like the city is educating residents to spot scam texts.
Understand How Invoice Scams Work in Business
Just like Denver residents receive scam texts about parking tickets, businesses often get emails, calls, or even paper mail pretending to be:
Utility bills
Office supply invoices
Vendor service renewals
Domain registration notices
Government license payments
These fake invoices look professional. They might include logos, mock account numbers, and “due immediately” messages. And if your team doesn’t double-check, you could pay for something you never ordered.
Use Verified Vendor Lists and Internal Approvals
For growing teams, create a list of approved vendors and recurring expenses. Train your admin or finance assistant to confirm:
Vendor name matches past invoices
Services were actually delivered
The billing contact is familiar
Amounts and terms are consistent
If anything seems off, pause the payment and investigate—just like you’d confirm the authenticity of a parking fine before paying it online.
Train Your Team to Spot Red Flags
Invoice scams work when employees are overwhelmed, distracted, or untrained. Share these common red flags:
Sudden invoice from an unfamiliar vendor
Changes in payment instructions or bank details
High urgency (e.g., “Due today to avoid cancellation”)
Poor grammar or formatting
Suspicious email domains (e.g., .info or .biz)
This is part of standard remote operations training where awareness is your best defense.
Use Invoice Verification Tools
If you use platforms like QuickBooks, Zoho, or Xero, take advantage of:
Automated invoice matching
Flagging duplicate or unusual invoices
Role-based approval flows
Alerts for changes in banking details
These tools function like scam filters for your inbox—keeping fake requests from getting paid.
Implement Two-Person Approval for Payments
A simple but powerful tactic is the “four-eyes principle”—requiring two people to approve payments above a certain amount. For example:
Admin enters the invoice
Finance lead reviews and approves
Payment proceeds only if both agree
This stops scammers from reaching a single overworked employee with payment authority.
Keep Payment Communications Centralized
Avoid receiving or acting on invoice instructions over text, social media, or personal email. All billing should flow through a centralized email or platform (e.g., admin@yourcompany.com).
Centralization helps:
Track communication history
Spot phishing messages
Ensure all invoices are stored and reviewed consistently
It’s the business version of using official portals for parking violations instead of clicking random links.
Verify Changes in Banking Info via Phone
If a vendor suddenly asks you to change their bank details or wire transfer instructions, do not rely on email confirmation alone. Call them directly using a known phone number and verify the request verbally.
This “call-and-confirm” step has saved countless businesses from major invoice fraud—just as Denver is asking residents to call 311 to confirm parking notices.
Regularly Audit Your Accounts Payable
Even if everything looks fine on the surface, it’s smart to review your vendor payments quarterly. Look for:
Duplicate payments
Fake or fraudulent entries
Services paid for but not delivered
Unusual vendors added without notice
This process is similar to conducting field service audits to ensure every transaction is tied to real activity.
Leverage Virtual Assistants for Invoicing Support
Many businesses are now turning to virtual admin teams to help with invoicing and payment tracking. With the right training, a virtual assistant can:
Organize invoice files
Cross-check delivery against payments
Follow up with clients
Flag anything unusual before it hits your books
They act like your first line of defense—reviewing paperwork so you can focus on strategy.
Consider Cyber Insurance for Financial Protection
If your business handles large payments or sensitive data, cyber liability insurance can help recover losses from:
Invoice scams
Phishing attacks
Ransomware or data breaches
This is especially important if you’ve been targeted in the past or operate in industries with high-value transactions.
Final Thought: Prevention Pays Off
Denver’s warning is more than a public safety alert—it’s a lesson for businesses too. Whether it’s a fake parking invoice or a phony domain renewal, scammers rely on speed, fear, and confusion.
By setting up clear processes, training your team, and using smart software, you can keep your business safe—just like Denver residents are learning to stay alert on their phones.
How Multiple Vendors Took Legal Action
Legal documents reveal Frisch’s Restaurants faced a wave of lawsuits from several vendors due to unpaid invoices. These included:
T.B.S. Meat Distributors sued for $34,783, stating Frisch’s shut down operations while still owing for meat deliveries.
Joffrey’s Coffee & Tea filed a breach-of-contract claim for over $30,000, citing interest clauses in their contract.
FC Cincinnati filed for $156,500, related to unpaid sponsorship agreements.
Schreiber Foods and CrunchTime! Information Systems joined with lawsuits totaling over $90,000.
NNN REIT, a landlord, filed for $11.7 million in damages for missed rent and lease obligations.
These cases collectively exposed a network of financial liabilities built up under Frisch’s management.
Key Patterns Across the Lawsuits
Lack of payment guarantees: Vendors provided goods and services without upfront payments or payment security.
Verbal assurances unfulfilled: Payment promises, like T.B.S.’s alleged $20,000 check, weren’t documented.
Abrupt operational shutdowns: Vendors had no warning of closures or financial stress.
Allegations of asset transfers: Plaintiffs claimed Frisch’s owners transferred assets to evade creditor claims.
Late fees and interest clauses mattered: Vendors with contracts including these terms had stronger legal positioning.
Legal Terms That Played a Role
Breach of Contract: Nonpayment for contracted goods or services constituted the central complaint in every case.
Unjust Enrichment: Vendors argued Frisch’s benefited without compensation.
Prejudgment Attachment: T.B.S. requested asset freezes to prevent the company from moving funds during litigation.
Fraudulent Conveyance: NNN REIT accused Frisch’s of transferring assets out of reach of creditors, potentially violating state law.
Vendor Recovery Options and Risks
Lawsuits and Court Judgments: Provide legal leverage but depend on the company’s asset availability and can be slow.
Asset Freezes: Offer faster control over funds, especially when business closures are imminent.
Bankruptcy Claims: May only recover a fraction of what’s owed and often take years to process.
Actionable Takeaways for Business Owners
Use signed contracts with payment schedules and enforcement clauses.
Set firm credit limits for all clients—even long-term partners.
Require deposits or milestone payments for large projects.
Stop service at the first sign of nonpayment.
Document all communication, including verbal payment promises.
Include late fee and interest clauses in agreements.
Review client operations for early warning signs like layoffs or store closures.
Steps to Prevent Similar Losses
Develop onboarding processes that assess creditworthiness.
Use accounting tools to track outstanding balances.
Train staff to flag unusual client behavior.
Monitor high-risk accounts closely.
Consult legal counsel when a client delays payments repeatedly.
Create internal protocols to suspend services and escalate issues quickly.
Conclusion
The lawsuits against Frisch’s show how financial mismanagement and lack of documentation can devastate vendor relationships. For small businesses, this is a reminder to treat collections seriously—using contracts, oversight, and quick action to protect their revenue streams.
Building Financial Resilience Through Smart Vendor Practices
While the Frisch’s lawsuits made headlines due to their scale, the underlying risk applies to businesses of all sizes. An unpaid invoice might seem like a one-off issue, but it often signals deeper problems—either in a client’s financial health or your company’s risk management systems.
Here’s how businesses can build financial resilience and prevent similar setbacks from harming their operations.
Know Who You’re Doing Business With
Before entering a vendor agreement, take time to assess the client's creditworthiness. This includes:
Reviewing business credit reports (via Experian, Dun & Bradstreet)
Checking for liens, lawsuits, or bankruptcies
Verifying contact information and business registration
Asking for trade references
For recurring or high-value clients, this due diligence is a must. It’s similar to how investors conduct background checks before funding a startup—it minimizes exposure and builds confidence in the transaction.
Structure Contracts with Risk in Mind
Too often, small vendors copy-paste contracts without tailoring them for enforcement. But a good contract doesn’t just define terms—it protects your business if something goes wrong.
Every contract should include:
Clear payment timelines
Late payment penalties
Termination clauses for nonpayment
Escalation steps and legal jurisdiction
Asset security (if applicable), like collateral or lien rights
If Frisch’s vendors had stronger legal protections or personal guarantees, more might have recovered funds.
Monitor Accounts Receivable in Real-Time
Don’t wait until the end of the month to review who owes you money. Instead, use accounting tools like QuickBooks, Xero, or Zoho to track:
Invoice status (sent, viewed, overdue)
Average payment time per client
Payment concentration (i.e., whether one client dominates your AR)
Flagged accounts or slow payers
Setting up automated reminders and aging reports reduces the chance that a past-due invoice falls through the cracks.
Act Early and Escalate Quickly
When payments are missed, fast response is critical. Here’s a basic escalation timeline:
1–5 days late: Send a reminder email with invoice and due date.
6–10 days late: Call the client directly, confirming they received the invoice.
11–20 days late: Send a formal payment notice, referencing the signed agreement.
21+ days late: Notify the client that services will be paused and begin preparing a demand letter.
This structure protects your business without immediately resorting to litigation—and gives clients every opportunity to resolve things amicably.
Diversify Your Client Base
Overreliance on one major customer can cripple your business if they fail to pay. Ideally, no single client should account for more than 25–30% of your revenue.
In the Frisch’s case, vendors like T.B.S. were heavily exposed when Frisch’s commissary shut down. Diversification could have helped balance those losses.
Use Technology to Support Cash Flow
Modern invoicing and finance tools can automate:
Recurring invoices
Payment follow-ups
Escalation triggers
Customer payment portals
Credit scoring and risk alerts
This kind of back-office automation is critical as you scale. It enables teams to manage risk proactively instead of reacting after payment issues arise.
Work With Trusted Legal Advisors
Legal support isn’t just for court—having a lawyer review your contracts, collections letters, and risk exposure can save thousands later. Even a small retainer with a local firm can ensure you’re ready if clients stall or default.
By putting these systems in place, your business builds long-term protection—not just from nonpayment, but from the stress and disruption that late invoices can cause. Learning from high-profile failures like Frisch’s allows small businesses to get stronger, smarter, and more financially secure.
About OpsArmy
OpsArmy is building AI-native back office operations as a service (OaaS). We help businesses run their day-to-day operations with AI-augmented teams, delivering outcomes across sales, admin, finance, and hiring. Whether you're a startup scaling fast or an enterprise seeking efficiency, our trained virtual teams and tech-enabled processes keep your back office lean, accurate, and scalable.
Explore how we help businesses with:
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Visit operationsarmy.com to learn more.
Sources
WCPO 9 News – Frisch's Big Boy suppliers suing for unpaid invoices totaling thousands:https://www.wcpo.com/news/local-news/hamilton-county/cincinnati/frischs-big-boy-suppliers-suing-for-unpaid-invoices-totaling-thousands
Cincinnati Business Courier – Frisch’s landlord sues for $11.7M in unpaid rent, claims fraudulent transfer of assets:https://www.bizjournals.com/cincinnati/news/2024/01/10/frischs-landlord-sues-unpaid-rent-fraudulent-transfer.html
Wikipedia – Frisch’s Big Boy (for ownership and history context): https://en.wikipedia.org/wiki/Frisch%27s_Big_Boy
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