City set to seize BK assets

Published 11:06 pm Friday, October 3, 2008

FRANKLIN—Officials have begun to take steps to seize the assets of a restaurant owner who owes the city tens of thousands of dollars in meals taxes.

Azhar Holdings LLC, which owns Burger King restaurants in Franklin, Isle of Wight and Suffolk, is substantially behind on its tax payments in both Suffolk and Franklin. The company is now a collections target in both cities.

“We have taken a collection action” that allows the city to place liens on four different bank accounts, Franklin City Attorney Taylor Williams said Friday.

Two of those accounts “were very old” and had no funds available, he said, and the city continues to await word from the banks that hold the other two accounts. The liens were placed about two weeks ago, and the banks have until mid-October to respond to the collection action.

Customers at the Franklin and Windsor locations have reported that large portions of the restaurants’ menus were unavailable this week, and rumors in Franklin were rampant on Friday that the local franchise would close its doors.

Owner Sarmad Azhar did not return calls on Friday, but an assistant manager at the store said he had briefly visited that day. She denied any knowledge that the store was closing and said employees continue to be paid there, despite reports that employees at some of Azhar Holdings’ other stores have seen their paychecks bounce.

Bounced checks also have been a problem for Suffolk City Treasurer Ron Williams, who told the Suffolk News Herald recently that a $3,300 check from the company was worthless. That payment had been intended to settle a portion of the $20,000 bill that Azhar owes for meals taxes in that city.

Taylor Williams said Friday that Franklin is “further behind than that.” He declined to give a firm total of the extent to which the company is in arrears, citing a state code intended to protect confidential company information. But, he said, “You’d be shocked and amazed.”

Franklin requires restaurants to collect a 6.5-percent tax on meals served. The businesses are expected to file tax returns to the Commissioner of the Revenue by the 20th of each month, and to pay the taxes to the treasurer by the same date.

Williams said Azhar had neglected to file the returns or to pay the taxes during 2007, resulting in a denial being issued when the company sought to renew its business license this year.

The company started filing the returns again in January, and a payment plan was set up that resulted in payments being made in April, May, June, July and August. Those payments were based on current tax levels, but they were applied to last year’s costs, he said.

Penalties also are due on the outstanding balances, Williams said.

Nonetheless, he didn’t seem confident that the city would get the money it’s owed.

“I’m not sure we’ll be able to squeeze any more blood out of that turnip,” he said.

Despite the rumors and the diminished range of menu choices, business was brisk at the Franklin store at lunchtime on Friday. Thirsty customers, however, only had Coke and Diet Coke and soft drink choices. The store also had signs posted notifying customers that chicken fries, wraps, apple fries and pies, salads, cookies and fish were unavailable. Breakfast customers were unable to choose biscuits, sausage or eggs.