After six long years, one of the most contentious lawsuits in the history of franchising has finally gone to trial in California. It pits thousands of small franchise owners against shipping giant United Parcel Service, which sparked the row after acquiring Mail Box Etc.
After closing the deal in 2001, UPS began a major effort to convince the 3,400 franchise owners to rename their outlets “The UPS Store†and to sign an amended franchise agreement. At first, both sides seemed to be on the same page.
But the franchisees charge that the company’s effort to convert them, known as the Gold Shield campaign, after UPS’s ubiquitous logo, was intentionally deceptive and materially changed the ground rules for their operations. In effect, they claim, it broke their franchise agreement and dismantled the existing franchise structure.
They also charge that the company failed to disclose performance and financial data in addition to other violations of franchisee laws in an effort to persuade them to switch.
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