Best Blinds… Worst Franchise?
Best Blinds franchise owners Eric & Laurie Wilson certainly think so. They bought a Best Blinds franchise then found out the franchisor Laura Melissa Wall-McMahel had already sold the exclusive territory rights to someone else… and never bought back the rights as promised.
The Best Blinds franchisees sued. When the court ruled in the franchisee’s favor, the blind company franchisor tried to get out of paying the judgement by declaring bankruptcy. See court record excerpt below.
Have you had experience with the Best Blinds franchise or ? Share your experience by leaving a comment below.
From Leagle:
ERIC WILSON and LAURIE WILSON, Plaintiffs,
v.
LAURA MELISSA WALL-MCMAHEL, Defendant.Case No. 09-05754-8-JRL, Adversary Proceeding No. 09-00231-8-JRL.
United States Bankruptcy Court, E.D. North Carolina, Raleigh Division.
July 22, 2010.
ORDER GRANTING PARTIAL SUMMARY JUDGMENTJ. RICH LEONARD, Bankruptcy Judge
This matter came before the court on cross-motions for summary judgment. On June 28, 2010, the court conducted a hearing on the matter in Raleigh, North Carolina.
JURISDICTION AND PROCEDUREThis court has jurisdiction over the parties and the subject matter of this proceeding pursuant to 28 U.S.C. §§ 151, 157, and 1334, and the General Order of Reference entered by the United States District Court for the Eastern District of North Carolina on August 3, 1984. This is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2), which this court may hear and determine.
UNDISPUTED FACTS1. The defendant is the owner of a window dressing business known as Best Blinds. Best Blinds began operations in 1997. Before 2007, the defendant entered into business training agreements with third parties. Such agreements allowed third parties to conduct business as distributors of Best Blinds’ products in exclusive distribution areas.
2. In January 2005, Thomas Christopher Lawing (“Lawing”) and Brandy Hindes (“Hindes”) entered into a business training agreement with the defendant encompassing Johnston, Franklin, and Granville counties.
3. Early in 2007, the defendant formed Best Blinds Franchising, Inc. for the purpose of selling Best Blinds franchises and converting existing distributors to franchisees. Though Lawing and Hindes were given the opportunity to participate in the franchise program they were not required to do so.
4. In March 2007, Lawing, as a distributor, visited the plaintiff’s home with the intent of selling window blinds. While there, the plaintiffs inquired about franchise opportunities with the Best Blinds company. Lawing referred the plaintiffs to the defendant.
5. The plaintiffs contacted the defendant and expressed their interest in becoming franchisees for certain counties including Franklin and Granville. The defendant informed the plaintiffs that Lawing and Hindes already had exclusive rights in those counties, but thought they would be willing to sell their interest.
6. The defendant was aware that in accordance with the January 2005 business training agreement, a written release from Lawing and Hindes was required before the plaintiffs could conduct business in the subject counties.
7. Lawing and Hindes negotiated with the defendant that they would release Franklin and Granville counties for a sales price of $10,000.00. The parties came to a verbal agreement that instead of paying $10,000.00 outright, the amount would be credited against monies owing to the defendant.
8. In July 2007, the defendant mailed a release to Lawing and Hindes along with a franchise agreement. The release was intended to memorialize the verbal agreement. Neither Lawing or Hines signed the release.
9. On August 12, 2007, the defendant presented the plaintiffs with a franchise agreement granting them the exclusive right to operate a Best Blinds franchise in Person, Granville, Vance, Franklin, and Warren counties. The plaintiffs paid a sum of $50,437.11 for the franchise agreement. At the time the plaintiffs executed the franchise agreement, the defendant was aware that the requisite release had not been obtained.
10. On August 30, 2007, the male plaintiff received a call from Lawing who communicated that neither he nor Hindes had signed the release. After receiving the call, the male plaintiff contacted the defendant who assured him the problem was being resolved. The defendant advised the plaintiffs to continue business as usual. Over the course of the following months, the defendant continually reassured the plaintiffs in this manner.
11. On December 10, 2007, having failed to obtain the release, the defendant offered the plaintiffs an option to rescind the franchise agreement. The plaintiffs accepted the offer on December 26, 2007. A termination agreement was drafted by an attorney for the defendant, which included a non-competition clause and obligation for payment of termination fees. On January 18, 2008, the plaintiffs informed the defendant that the proposed termination agreement did not comport with the terms the parties discussed.
12. On February 28, 2008, the plaintiffs initiated an action in the Superior Court for Vance County against Best Blinds Franchising, Inc. and the defendant.
13. On March 20, 2009, a judgment was entered against the defendant. The court found that the defendant committed an act of unfair and deceptive trade practice. Damages were awarded in the amount of $48,787.11, and were ordered trebled in accordance with N.C.G.S. § 75-16.
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