Wiggin and Dana's Franchise Law Blog

Paul Davis Franchisees Aid Child Advocates

The website for Paul Davis Restoration and Remodeling recites that the franchise network "built our reputation on bringing calm and order to homeowners’ lives ravaged by fire, water or other damage." According to this article system franchisees are focusing on "other damage" that puts lives in turmoil by donating time, labor and materials as part of a "Restoring America One Home at a Time" project to spearhead a home remodeling project to help a couple who have become advocates for child safety since suffering the tragedy of the abduction and loss of their daughter in 2000, a story those of us in Massachusetts followed closely, and who are coping with the impact of a stroke suffered by the husband this past June. The project will include an addition that will become the office for the Molly Bish Foundation.

Sour Applebee's

A director who is the largest individual shareholder of Applebee's International intends to back up his vote against the acquisition of Applebee's by IHOP Corp. for $25.50 per share (see earlier blog posting) by seeking appraisal rights in court to achieve a higher value for his stock after the deal is consummated, according to this article. With 3.2% of Applebee's stock, which translates to an over $62 million payout for his shares at the $25.50 per share price, the director should be able to be "Eatin' Good In The Neighborhood," win or lose.

Brown's Platinum Shield Association Goes To Head of Class

The 2001 acquisition of Mail Boxes, Etc., Inc. by United Parcel Service and the resulting conversion of more than 3400 Mail Boxes Etc. units to The UPS Store brand continues to be a source of litigation between UPS and former MBE franchisees. A California appellate court has certified a national class action brought by current and former MBE franchisees who have joined together to form the Platinum Shield Association according to this article. The suit alleges that UPS withheld information from MBE franchisees on tests of the new business model when trying to convert them to The UPS Store brand. The stakes in the newly certified class action are important to both sides. If the franchisees are successful, class members would have the opportunity to rescind their UPS Store contracts and seek related damages. UPS has been challenged by franchisees recently relating to aspects of the business model, including allowing customers to print labels and pay online and drop off for free at The UPS Store locations (see earlier blog posting), an inaccurate measurement system resulting in back-charges to franchisees for higher shipping costs (see earlier blog posting), and policies that require franchisees to deliver alcohol and pornographic materials (see earlier blog posting).

Wendy's Franchisees Missing Dave

Wendy's largest franchisees have penned a letter critical of management since founder Dave Thomas died in 2002, according to this article. Complaints include the introduction of a summery fruit salad in the depth of winter, the current ad campaign featuring men wearing pigtailed Wendy fright wigs and an autocratic decision-making style. Wendy's International Inc. is for sale (see earlier blog posting).

Syrup Suit Slapped on Wendy's

Wendy's faces more tangible problems from its largest franchisee than criticism of management. DavCo Restaurants Inc., operator of 159 Wendy's restaurants, and a signatory to a letter critical of management (see preceding blog posting), has filed suit against Wendy's for $2 million alleging Wendy's improperly inflated the cost of soda syrup since 1998 and diverted the extra money to the national advertising fund, according to this article. A Wendy's spokesperson has said the suit is without merit.

Realogy Getting More Real

Realogy Corporation, franchisor of five residential and commercial real estate brokerage brands, CENTURY 21®, Coldwell Banker®, Coldwell Banker Commercial®, ERA®, and Sotheby’s International Realty®, will be adding another well known mark to its franchising offerings. According to this press release, Realogy will be launching a new international residential real estate franchise system using the Better Homes and Gardens® Real Estate brand under a long-term license with magazine publisher Meredith Corporation.