Franchisor Lawyer Sees the Light

Famed franchisor attorney Arthur Pressman has seen the light.

In a battle with auto alarm manufacturer LoJack Corporation (NASDAQ: LOJN), a Long Island, New York distributor was being overcharged. Despite assurances to the contrary, LoJack was charging the dealer more than others were paying. In fact, LoJack was selling units directly to consumers for $150 installed while charging the dealer $175 for uninstalled units.

That the dealer would sue is not remarkable. But the dealer's choice of the well-known franchisor attorney is a surprise.

Nixon Peabody partner Arthur Pressman not only took on the case, but also made the argument that what had begun as a looser licensing agreement for product distribution has actually become a more controlled franchise arrangement and therefore subject to the New York Franchise Sales Act.

On September 30, federal judge Joanna Seybert disagreed. While giving Pressman credit for his "novel theory" that the distribution agreement had "blossomed" into a franchise, she deemed that it was still a distribution agreement.

Informed that Pressman had deserted the Dark Side to now represent franchisees, one industry leader who requested anonymity said: "Aww.... I knew he had it in him."

Pressman's colleagues are said to be planning an intervention and de-programming before things get out of hand.

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G.L.M. Security & Sound Inc v LoJack Corp., E.D.N.Y., September 30 2011

For GLM: Arthur Pressman, Nixon Peabody (Boston)

For LoJack: James Rubinger, Plave Koch (Reston VA)