Franchisor Saves Market, Protects Customer List From Competitor
A franchisor client received a letter from one of its largest multi-unit franchisees, indicating they were closing all their stores, and demanding a six figure payment to protect from having more than 10,000 customer names and information delivered to a competitor. Armed with the letter from the franchisee, Jim Susag and Cynthia Klaus obtained a restraining order, preventing the franchisee from divulging any confidential information concerning the business. In the meantime, Chuck Modell developed a strategy for the client to contact the franchisee’s landlords and equipment lenders, and make arrangements to enter into new, temporary leases at key locations, while also temporarily leasing the equipment recovered by the lenders at those locations. With little disruption to the business, 12 of the locations reopened immediately after abandonment by the franchisee, giving the client time to find a new franchisee who would ultimately purchase the equipment from the lenders, and enter into new leases for the sites.