Entrepreneur Magazine Files Trade Secret Lawsuit
MarketWatch reports that Entrepreneur Media, Inc. (EMI) filed a lawsuit against former employees who it alleges stole its franchise ranking concept, known as the Franchise 500.
The dispute centers on the behavior of Rieva Lesonsky, the former Editorial Director for the consumer publisher. Shortly after voluntarily ending her 26-year employment with EMI in April 2008, Lesonsky created a company, SMB Connects, and is performing freelance editorial work for AllBusiness.com that duplicates EMI's signature rankings.
EMI claims that Lesonsky began contacting its customers and soliciting them to complete an application for an "Annual Franchise 300 Ranking" with AllBusiness.com. The application was substantially similar to the one EMI has used for its Franchise 500 rankings for the last thirty years.
As readers know many of us here at BMM including me, find the Entrepreneur Franchise 500 to be nothing more that an up to date listing of franchise opportunities, and not much more.
This quote from Fred DeLuca of Subway is interesting, he says: "The Franchise 500 is the gold standard for consumers and the franchise community, who rely on the rankings when making critical business decisions," says Fred DeLuca, President and founder of Subway.
Subway was listed as #1 for the years 2007, 2006, 2005, 2004, but lost out to 7-Eleven in 2008, Subway was listed as #2. I believe anyone making critical decisions using Entrepreneur Franchise 500 information should think twice. It will be interesting to see if Allbusiness.com follows suit.
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