Samaha vowed to appeal but the fraud judgment destroyed Franchise's viability; the company and its subsidiaries all filed Chapter 11 bankruptcy petitions on August 18, 2004.

Its initial employees were Elie Samaha and Ashok Amritraj, who would leave two years later to start Hyde Park Entertainment.

On May 19, 1999, the company had signed a deal with Intertainment in order to bring all 60 motion pictures that Franchise had been receiving to Germany.

The company alleged that Franchise had defrauded it to the tune of over $75 million by systematically submitting "grossly fraudulent and inflated budgets".

Intertainment's head Barry Baeres told the court that he had only funded Battlefield Earth because it was packaged as a slate that included two more commercially attractive films, the Wesley Snipes vehicle The Art of War and the Bruce Willis comedy The Whole Nine Yards.