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UPS May Dodge Class-Action Suit
A few months ago momentum seemed to be building for former franchisees of Mail Boxes Etc. (MBE) to file a class-action lawsuit against United Parcel Service (UPS), which purchased MBE in 2001. Disgruntled franchisees were complaining that the offer to rebrand their stores to 'The UPS Store' would cost them the ability to ship through UPS competitor Federal Express, as has been the situation under their franchise contracts.
Attorneys Alec Sohmer and Andrew Palmer, of Hanover, MA, had been in contact with many franchisees who were seeking representation. But through his public relations representative Palmer told FBLA in early May that 'this suit is on hold.'
Approximately 3,100 of the approximately 3,400 MBE franchise stores have signed up to become UPS-branded, said Rich Hallabrin, a spokesman for MBE. 'The franchisees have given a phenomenal endorsement to The UPS Store concept,' Hallabrin said, adding that the company has been rolling out the new store format across the country since early April, and it will spend about $75 million on store conversions, apparel allowances and advertising. The company is also enjoying an increase in inquiries from prospective new franchisees, he said.
MBE franchisees make money by selling a variety of business services, including packaging, copying, notarizing, and arranging for pickups from UPS, Federal Express, and other commercial shippers. Consumers are charged the regular shipping rate, but the shipping company charges the MBE franchise less than that amount; the discount is profit for the franchisee.
And that's where the problem arises. FedEx has said that it will no longer pick up from former MBE stores if they convert to The UPS Store format. This will make the franchisees into sole-source providers of shipping, which they say violates their contracts. UPS says that the 20 percent rebates it is offering on packages, combined with the added business they will get from UPS's national marketing program, will more than make up for the lost FedEx business.
So far, the majority of franchisees seem to agree. 'Only a handful of the [MBE franchisees] have volunteered to join the class-action suit and the remainder have taken a wait-and-see approach,' acknowledged attorney Palmer's media representative.
Subway Franchisee, Franchisor Sued After Car Accident
A Subway franchise in Salem, CT, has been sued in the New London Superior Court over the death of a teenager who was killed in a car accident allegedly caused by a 20-year-old employee of the restaurant. The employee, Timothy Kaplan, crashed his car after leaving work, and two people eventually died from the accident. Allegedly drunk, Kaplan was 20 years old at the time, below Connecticut's legal drinking age.
The lawsuit charges that the owner and manager of the Subway franchise regularly allowed Kaplan to consume alcohol while at work, said Ernest Teitell, the attorney for the family. 'We are alleging that a minor was served alcohol at the restaurant by the owner,' said Teitell. 'He left there and then was partly responsible for causing a car wreck that killed my client.'
Doctors Associates, Inc., which franchises Subway restaurants, has also been sued for vicarious liability for the accident. Doctor's Associates 'has responsibility to oversee its franchisee,' said Teitell. 'We believe that the evidence will show that alcohol was being served in the store for a long time ' and stored on-site. We have not done discovery yet.'
UPS May Dodge Class-Action Suit
A few months ago momentum seemed to be building for former franchisees of Mail Boxes Etc. (MBE) to file a class-action lawsuit against
Attorneys Alec Sohmer and Andrew Palmer, of Hanover, MA, had been in contact with many franchisees who were seeking representation. But through his public relations representative Palmer told FBLA in early May that 'this suit is on hold.'
Approximately 3,100 of the approximately 3,400 MBE franchise stores have signed up to become UPS-branded, said Rich Hallabrin, a spokesman for MBE. 'The franchisees have given a phenomenal endorsement to The UPS Store concept,' Hallabrin said, adding that the company has been rolling out the new store format across the country since early April, and it will spend about $75 million on store conversions, apparel allowances and advertising. The company is also enjoying an increase in inquiries from prospective new franchisees, he said.
MBE franchisees make money by selling a variety of business services, including packaging, copying, notarizing, and arranging for pickups from UPS,
And that's where the problem arises. FedEx has said that it will no longer pick up from former MBE stores if they convert to The UPS Store format. This will make the franchisees into sole-source providers of shipping, which they say violates their contracts. UPS says that the 20 percent rebates it is offering on packages, combined with the added business they will get from UPS's national marketing program, will more than make up for the lost FedEx business.
So far, the majority of franchisees seem to agree. 'Only a handful of the [MBE franchisees] have volunteered to join the class-action suit and the remainder have taken a wait-and-see approach,' acknowledged attorney Palmer's media representative.
Subway Franchisee, Franchisor Sued After Car Accident
A Subway franchise in Salem, CT, has been sued in the New London Superior Court over the death of a teenager who was killed in a car accident allegedly caused by a 20-year-old employee of the restaurant. The employee, Timothy Kaplan, crashed his car after leaving work, and two people eventually died from the accident. Allegedly drunk, Kaplan was 20 years old at the time, below Connecticut's legal drinking age.
The lawsuit charges that the owner and manager of the Subway franchise regularly allowed Kaplan to consume alcohol while at work, said Ernest Teitell, the attorney for the family. 'We are alleging that a minor was served alcohol at the restaurant by the owner,' said Teitell. 'He left there and then was partly responsible for causing a car wreck that killed my client.'
Doctors Associates, Inc., which franchises Subway restaurants, has also been sued for vicarious liability for the accident. Doctor's Associates 'has responsibility to oversee its franchisee,' said Teitell. 'We believe that the evidence will show that alcohol was being served in the store for a long time ' and stored on-site. We have not done discovery yet.'
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