Former Mail Boxes Etc. Franchisees' Suit against UPS Certified
By Don Bauder
November 10, 2009
Superior Court in Los Angeles has announced the certification of a class action suit brought by former Mail Boxes Etc. franchisees against the chain's current owner, United Parcel Service (UPS). Mail Boxes Etc., a national chain competing with the Post Office, was one of San Diego's most prominent success stories until it was sold in mid-1997 to an overleveraged, acquisition-hungry conglomerate that collapsed into bankruptcy. In 2001, United Parcel Service bought Mail Boxes, and subsequently converted the units to UPS Store Centers. But franchisees chafed under UPS rules, such as the way it controlled pricing. Those who continued to operate Mail Boxes stores claimed their brand was destroyed. Both sued in L.A., and now that the class action status has been certified, the case can go forward.
Been there, done that. Only the lawyers win when it's David against Goliath.
Sadly, many times Ponzi's scenrio plays out in class actions.
Lawyers make out like bandits while the plaintiff's get crumbs-or even worse "coupons" for future purchases (very BIG in consumer class actions)
Response to post #1 That is often what happens. The big boys drown the small boys in paper. And the judge doesn't want to rock an establishment yacht. Best, Don Bauder
Response to post #2: In this case, the plaintiffs are UPS franchisees or former Mail Boxes franchisees who refused to become part of the UPS network. So it isn't the same as consumer or stockholder suits, in which your scenario often plays out. But the plaintiffs could get very little, if anything. Best, Don Bauder
UPS could have treated those franchisees very well. After all, the stores were the key to running the new operation successfully. It appears that UPS decided to run the thing top-down, and make the franchisees toe the line. But did UPS do better as a result? I doubt it. Why do these big corporations keep shooting themselves in the foot/groin/head?
Response to post #5: UPS has very good management. If the charges by the franchisees are true (and the court will have to determine that), it may be that the company is very astute at transportation but not so hot at retailing. Best, Don Bauder
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