Quickprint Settles Dispute With 175 of Its Franchisees
Financially troubled Quickprint of America Inc., a national fast-service printing franchiser that has been embroiled in a legal dispute with 175 of its 445 franchisees since 1983, said Thursday the disgruntled operators have agreed to drop their claims and leave the company.
Quickprint, which filed for protection under Chapter 11 of the U.S. Bankruptcy Code in August, 1983, will receive about $1.45 million from the departing franchisees--many of whom had been withholding royalty payments to Quickprint to protest the company’s alleged failure to provide marketing and other support under its franchise agreements.
The 175 franchisees will be allowed to retain the word “Quickprint” in their company names so long as the new names are preceded by a noun and not “confusingly similar” in design to Quickprint of America’s dancing red and white logo, said Richard Levin, a Los Angeles lawyer who represents Quickprint of America.
Daniel Slate, a Century City lawyer who represents the departing franchisees, called the settlement “a fair one for both sides.” He added that departing operators “have no present intention as a group of banding together” to form a competing franchise.
The 23-page agreement, which must be approved by the a bankruptcy judge in Los Angeles, appears to clear the way for Quickprint to regain some of its financial footing after disclosing in February, 1983, that it was suffering from reduced sales and was not receiving royalty and franchise note payments from many of its 445 franchisees.
“The agreement will allow us to put the company back together again,” company spokeswoman June Noel said.
The company, which had revenue of about $4 million in 1984, has been attempting to reorganize its financial affairs after filing under Chapter 11.
Under a plan recently reached with its creditors committee, Quickprint agreed to pay $1.1 million in cash to preferred and unsecured creditors and issue a $500,000, seven-year promissory note and common stock, enabling the creditors to own about 30% of the company.
However, Levin said Quickprint still faces difficulty with about half of its remaining 271 franchisees who are in arrears in royalty payments to the company.
