retail

FranchiseMart's Gary Lengel shows a video introducing a franchise matchmaking business at the International Franchise Expo. Photo/Blue MauMau

HOUSTON (Blue MauMau) - A legal battle is escalating between gasoline refiner and supplier CITGO Petroleum Corporation and a 14-year veteran franchise owner of 39 branded gasoline stations operating in America's heartland of Illinois, Wisconsin, Indiana and Iowa.

Convenience Store Chain Plans to Convert Hard-Pressed Independent Stores into 7-Eleven System

 DALLAS (Blue MauMau) - In regards to the announcement made last summer by 7-Eleven's Japanese parent company, Seven & I Holdings, that a $2.4 billion growth strategy plan was in the works in the U.S. over the next four years. New York franchisee Tariq Khan feels that the expansion showed commitment from the company to the franchise system. Khan, who served as the National Chairman of the National Coalition of Associations of 7-Eleven Franchisees for the past ten years, said,  "That is a good benefit for 7-Eleven corporate, which could add to the company's bottom line."

But Margaret Chabris, 7-Eleven's public relations and marketing director in Dallas, said the $2.4 billion growth plan was a figure quoted in a Nikkei Japanese story (Reuters) which 7-Eleven corporate never talked about. She said, "That figure for expansion would include remodels for existing stores, as well as remodels of stores that convert to the 7-Eleven brand under their "business conversion program," which started in 2005. And she said it includes acquisitions, such as White Hen Pantry. 

PALERMO, Italy (Blue MauMau) – Winsport in Italy is suing The Athlete’s Foot and in turn The Athlete’s Foot (TAF) is suing Winsport. Over the past six years The Athlete’s Foot has been dragged through Italian courts and had franchise development stopped dead in its tracks by Italian master franchise Winsport slc. In fact, the court hearings in Palermo, Sicily may continue for years to come, with the next appeal set for December 20.

Fellow Italian franchise owners and candidates have been able to follow TAF’s legal battle in the media. Italy’s leading franchise journal, AZFranchising in March featured a story (pdf, Italian) that covered the lawsuit, showing two opponents fighting it out (see photo).

Italy Stumbles after Fast Start

Winsport opened five stores within an 18-month period from 1998 until 2000, only to have its agreement eventually terminated for not opening enough stores in Italy as per the franchise agreement’s development schedule. The fledgling Italian sports chain vehemently complained that development goals could not be met because it was not receiving the products and support promised in the agreement by The Athlete’s Foot Marketing Europe, the European arm of The Athlete’s Foot.

Despite The Athlete's Foot being Atlanta-based, the signed Franchise Agreement is in Italian, not English. The clauses in Italian is where CEO Giuseppi Musso of Winsport S.A. says that the terms of the franchise agreement were not met by The Athlete's Foot or its subsidiary Athlete's Foot Marketing Europe, located in France. We make no claims to the accuracy of the English translation, which is done by the Italian Master Franchise.

Art. D pag 18. “L'affiliante (TAF) costituirà un comitato di selezione al quale parteciperanno rappresentanti dell'affiliante, dell'affiliato principale e degli affiliati principali degli altri territori. Tale comitato di selezione avrà per obiettivo quello di selezionare, per i negozi della rete di franchising The Athlete's Foot i prodotti piu' idonei alla stagione interessata, oltre a organizzare gli acquisti all'ingrosso."

Musso: The Franchisor must create a Committee together with the Franchisee (Winsport) that will select the products for every season for The Athlete's Foot Stores in Italy. The Committee will organize the wholesale purchasing of the products mentioned (by the way wholesale purchasing never made by TAF). 

Franchisees Down Under Complain They Are But Meat in The Renter's Sandwich

CANBERRA, Australia (Blue MauMau) - Small business owners in Australia are complaining that they lack market power in leasing premises. So Australia's Productivity Commission is undertaking a public inquiry to examine and report on difficulties small businesses may face in entering into commercial leases and the lack of buying influence. 

SmartCompany, an online magazine for small businesses, reports, "Underlying each of these complaints is the perception that shopping centre owners exercise superior market power over their tenants. For many tenants, this means lease negotiations involve just one choice – agree to the landlord’s offer, or walk away."

Unfortunately, because of the interruptions caused by the upcoming federal election (24 November), the Productivity Commission has extended its deadline for receiving submissions to its retail leasing inquiry to 31 March 2008. The  submissions to the inquiry are available below:

State Taking Franchisee Allegations of Inaccuracies Seriously

DETROIT (Blue MauMau) - In an article in the Detroit Free Press, Brad Deacon, hearing coordinator of the Michigan Department of Agriculture, said the state was continuing to work out a solution with UPS over its package measuring devices. Pez Afrin, a UPS Store franchisee in Commerce Township, filed a complaint with the state earlier this year claiming his store is overcharged everyday by $100 to $250 because of inaccurate measuring by UPS's machines. Although he is allowed to appeal the charges electronically, he says the process is time consuming and should not be necessary.

Afrin has also filed a lawsuit in U.S. District Court in San Francisco against the shipping giant for breach of contract and for violating racketeering laws. It is seeking class certification to cover the 10,000 package shipment centers and more than a million account holders that could potentially be affected, according to the article. Lawyers are attempting to consolidate his lawsuit with two others in Alabama and Oregon involving similar allegations.

California Appeals Court Gives Thousands of UPS Franchisees Permission to Move Forward as "Class"

LOS ANGELES (Blue MauMau) - In a press release posted yesterday on Blue MauMau, UPS loses in legal standoff with franchisees, the California Court of Appeals made a ruling that granted franchisees permission to move forward as a "class" instead of filing lawsuits individually. According to this latest strongly worded, 21-page ruling, the trial judge in the Superior Court of Los Angeles County erred in his decision of denying franchisees class certification.

The lawsuit, filed in April 2003, had claims against UPS of intentional misrepresentation and multiple statutory violations relating to UPS's conversion of MBE stores to The UPS Store model, after it purchased the MBE franchise in 2001 for $192 million. UPS sold the idea on the premise of increasing profitability for franchisees. But instead, according to the lawsuit, the conversion ended up moving profits to UPS, not to franchisees.

5th Circuit Court of Appeals Overturns Lower Court, Rules That Cell Phone Retailer Fraud Case to Be Tried

Editor's Note: The contributing writer, Mr. Solomon, is the attorney for the plaintiff

HOUSTON (Blue MauMau) - On Friday, October 5th, the 5th Circuit Court of Appeals vacated the summary judgment of the Federal District Court for the Southern District of Texas that summarily dismissed the case on procedural motions by defendants.

On appeal, the 5th Circuit ruled that the trial court erred and vacated the dismissal judgment. Certain executives were held not to be amenable to suit in Texas, but the main marketing person for WT remains a defendant personally.

Click here for text of the 5th Circuit Court opinion.

Humans and pets go back probably to the beginning of the human race. In many families, the most popular member is their dog. Everyone may be upset at each other, but not at the family dog. Depressed senior citizens snap out of their doldrums when a dog, wagging its tail, comes to visit their nursing home. And it's not just dogs. A restaurant in the heart of Waikiki does a booming business because of its huge, two-story marine aquarium (and their good food).

According to a recent Business Week cover story, Americans now spend $41 billion annually on their pets. To put that into perspective, that’s in excess of what Americans spend on the movies ($10.8 billion), playing video games ($11.6 billion) and listening to recorded music ($10.6 billion) combined!

The Business Week story goes on to say that The American Pet Products Manufacturers Assn. reports that 42% of dogs now sleep in the same bed as their owners, up from 34% in 1998. Their menu has now gone far beyond the dog food of years ago, reflecting the variety of the diets of the humans they live with. Half of all dog owners say they consider their pet's comfort when buying a car, and almost a third buy gifts for their dogs' birthdays.