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BREAKING: LOS ANGELES – The first day of trial began this morning with the Mail Boxes Etc. franchise owners facing off with their replacement franchisor in Morgate v United Parcel Service, alleging that UPS broke the franchise agreement by dismantling an existing owner-operated franchise structure after its takeover of Mail Boxes, Etc.
Correspondent Cynthia Cohen, Ph.D., of Courtroom View Network, reported during the lunch break that Judge William Highberger of the Superior Court of California at Los Angeles focused on the threshold of what the franchise owner and franchisor signed in the franchise contract. Michael Aguirre, the attorney representing the franchise licensees took the morning in replying and building his case that the franchisees who owned Mail Boxes Etc (MBE) stores had a right to renew, but were not obliged to "give up MBE citizenship." He argued that the franchise renewal was to be "evolutionary," and not “revolutionary.”
Aguirre then showed slide after slide highlighting dramatic changes between franchise agreement clauses.
The judge asked the franchisee attorney about the concept of the “System” and commented that Mail Boxes Etc. was not a focused shipping service provider (like the UPS Store).
Another person in attendance emailed Blue MauMau that right before breaking for lunch, Aguirre commented how it was strange that the franchisor performed due diligence for one week on the acquisition, but didn’t hire attorneys or others on what it would mean to franchisees. And yet those representing the firm wrote down that they understood that they would have to contend with franchisee unrest and conflict over the acquisition.
Read much fuller details reported by Cynthia Cohen of Courtroom View Network as she sits in on the hearing and then blogs about it during lunch and at the end of each trial day in Los Angeles. ($25 subscription fee required to have access to all of the blogs)