As reported by a local Pittsburgh newspaper, a newly-formed General Nutrition Operators Association ("GNOA") claims that health food and supplement giant GNC has been undermining its efforts to form a franchisee association. The GNOA claims that vendors who agreed to contribute free products and offer discounts for new members were "warned off" by the company. GNC denies the claim. Although GNC has approximately 1,241 domestic franchised stores, the GNOA has signed only a small number of members, and GNC denied that it even knew of the new association's existence. While certain state laws prohibit a franchisor from preventing or interfering with a franchisee association, the franchisor is under no obligation to deal with the association, once formed. In a statement, GNC announced its policy that it does not endorse independent associations.
GNC has recently been working through litigation with 400 franchisees over the company's marketing practices. The case was scheduled for mediation on Friday. For more about franchisee associations generally, click here.
Posted by franchiselawblog at September 16, 2005 04:28 PM