Franchise & Business Opportunity
Case Summaries: 1997 - 1998

FTC v. AmeraPress, Inc., et al., Civ. No. 498-CV-0143-A (N.D. Tex.), filed February 17, 1998.

This case involves the sale of pre-paid calendar, business card and trading card business opportunities for $1,800 to $10,000. The Commission's complaint alleges that AmeriPress, Inc., Voxcom Sales, LLC, The Home Business Group, Lawrence R. Biggs, Jr., Kim Crowther, and Donald G. McClellan were engaged in a common enterprise that violated Section 5 by misrepresenting that purchasers can reasonably expect to achieve a specific level of earnings.

F.T.C. v. Carousel of Toys USA, Inc., Civ. No. 97-8587 Civ-Ungaro-Benages (S. D. Fla.), filed July 29, 1997.

This case involves the sale of carousel display rack business ventures promoting Disney and other trademarked products. The Commission's complaint alleges that Carousel of Toys USA, Inc., and Kelie Brodzinski violated Section 5 by misrepresenting that purchasers can reasonably expect to achieve specific level of earnings (such as retail sales of $200 to $400 per week per display rack). Defendants allegedly also failed to disclose that purchasers are charged the retail price for initial product inventory. In addition, the complaint alleges that the defendants violated the Franchise Rule by: (1) failing to provide prospective franchisees with a complete and accurate disclosure document in the time period required by the Rule; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

F.T.C. v. Edward P. Epstein, et al., Civ. No. 98-0054 (D. Ariz.), filed January 12, 1998.

This case involves the sale of medical billing center business opportunities costing $2,500 to $6,000. The Commission's complaint alleges that Edward P. Epstein, Electronic Filing Academy, Inc., and Electronic Filing Associates, Ltd. violated Section 5 by misrepresenting that purchasers can reasonably expect to earn substantial income from the medical billing opportunity.

F.T.C. v. Greenhorse Communications, Inc., et al., Civ. No. 1:98-CV-00245-M (D.N.H.), filed April 20, 1998.

This case involves the sale of a business opportunity for website design, construction and hosting services for small businesses. The complaint alleges that Greenhorse Communications, Inc., and Lynn Haberstroh violated the Franchise Rule by: (1) failing to provide prospective franchisees with a basic disclosure document; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document. In a Stipulated Final Judgment and Order For Permanent Injunction filed concurrently with the complaint and approved by the Court on April 30, 1998, the defendants are permanently enjoined from violating the Franchise Rule, required to offer rescission to all purchasers, and provide a full refund to any purchaser who elects to rescind.

F.T.C. v. Hart Marketing Enterprises Ltd., Inc., et al., Civ. No. 98-222-CIV-T-23E (M.D. Fla), filed February 2, 1998.

This case concerns the sale of business opportunities involving free-standing kiosks that are designed to allow customers to access the Internet, as well as display racks containing various products, such as air-fresheners. The Commission's complaint alleges that Hart Marketing Enterprises Ltd., Inc., Internet Space Station, Inc., Four Seasons Distributing, Inc., James Weems, Robert Lemcke (a/k/a Mark Walker), Edward Patrick Evans (a/k/a/ Patrick Evans or Edward Adams), and Bruce Blair violated Section 5 by misrepresenting: (1) that purchasers can reasonably expect to achieve a specific level of earnings (such as gross revenues of between $500-$700 per week per kiosk); (2) that certain locators provided or recommended by the defendants have already found or will find profitable locations for the kiosks or display racks; and (3) that company-selected references have purchased the defendants' business venture and will provide reliable descriptions of the references' experiences with the defendants' business venture. In addition, the complaint alleges that the defendants violated the Franchise Rule by: (1) failing to provide prospective franchisees with a basic disclosure document; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

F.T.C. v. Hi Tech Mint Systems, Inc., et al., Civ. No. 982-3509 (S.D.N.Y.), filed August 18, 1998.

This case involves the sale of chocolate mint vending machine business opportunities. The Commission's complaint alleges that Hi Tech Mint Systems, Inc., and Rod DePuond (a/k/a Thomas DePung) violated Section 5 by misrepresenting that: (1) purchasers can reasonably expect to achieve a specific level of earnings and that the amounts claimed are accurate estimates of the earnings purchasers can reasonably expect; (2) defendants would provide purchasers with "Take-One" Visa or MasterCard applications, Hotel Express applications and Ballot Box forms to provide a source of additional income; (3) recommended locators are successful in placing purchasers vending machines in profitable locations a substantial portion of the time; and (4) recommended locators have secured pre-existing high-traffic locations in which purchasers machines will be placed. In addition, the complaint alleges that the defendants violated the Franchise Rule by: (1) failing to provide prospective franchisees with a basic disclosure document; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

F.T.C. v. Inetintl.com, et al., Civ. No. 98-2140 (C.D. Cal.), filed March 25, 1998.

This case involves the sale of "Internet Business Marketing System" franchises for the sale of internet access and other services to the public. The Commission's complaint alleges that Inetintl.com, (a/k/a Inet International), and its officers, Craig A. Lawson ( a/k/a Bob Bryan), Erik R. Arnesen, and Stanley R. Goldberg (a/k/a Geoff Stevens), violated Section 5 by misrepresenting that: (1) purchasers can reasonably expect to achieve specific levels of earnings; and (2) that certain company-selected references have purchased the defendants' business ventures and will provide reliable descriptions of the references' experiences with the defendants' business ventures. In addition, the complaint also alleges that the defendants violated the Franchise Rule by: (1) failing to provide prospective franchisees with a basic disclosure document; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

F.T.C. v. Licensed Products U.S.A., Inc., Civ. No. 97-938-CIV-ORL-22A (M.D. Fla.), filed July 30, 1997.

This case involves the sale of carousel display rack business ventures promoting licensed Disney, Warner Brothers, Coca-Cola, and other trademarked products. The Commission's complaint alleges that Licensed Products U.S.A., Inc.; Equipment Wholesalers of America, Inc.; Sports Centers of America, Inc.; American Marketing Systems, Inc.; William Hooper; Dale Sawyer; John Wheaton; David Howard; and Larry Howard violated Section 5 by misrepresenting: (1) that purchasers can reasonably expect to achieve a specific level of earnings (such as yearly income of $3,600 per carousel display rack); and (2) that recommended locators can place the carousel display racks in profitable locations. In addition, the complaint alleges that the defendants violated the Franchise Rule by: (1) failing to provide prospective franchisees with accurate and complete disclosure documents within the time period required by the Franchise Rule; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

F.T.C. v. Thomas Maher, et al., Civ. No. WMN-98-495 (D.Md.), filed February 19, 1998.

This case involves the sale of Internet billboard business opportunities. The Commission's complaint alleges that Thomas Maher, Dorian Reed, Audrey Reed and Internet Business Broadcasting, Inc., violated Section 5 by misrepresenting that: (1)purchasers can reasonably expect to achieve a specific level of earnings; and (2) defendants will provide a full refund of purchasers' investment. In addition, the complaint also alleges that the defendants violated the Franchise Rule by: (1) failing to provide prospective franchisees with a basic disclosure document; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

F.T.C. v. MII Investment Corp., et al., Civ. No. 98-C-543 (N.D. Ill.), filed September 1, 1998.

This case involves the sale of area distributorships for the sale of a needle-less insulin injection device. The Commission's complaint alleges that MII Investment Corp. and its president, Gary Warren Moore, violated Section 5 by misrepresenting that purchasers could reasonably expect to achieve a specific level of sales or earnings. In addition, the complaint alleges that the defendants violated the Franchise Rule by: (1) failing to provide prospective franchisees with a basic disclosure document; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document. In a Stipulated Final Judgment and Order of Permanent Injunction filed with the Complaint, the defendants are required to pay $50,000 in consumer redress, are permanently enjoined from violating the Franchise Rule and barred from misrepresenting: (1) the income, profit or sales volume that has been or may be achieved by purchasers and (2) the length of time that it will or may take to recoup a purchaser's investment.

F.T.C. v. National Consulting Group, Inc., et al., Civ. No. 98 C 0144 (N.D. Ill.), filed January 12, 1998.

This case involves the sale of medical billing center business opportunities. The Commission's complaint alleges that National Consulting Group, Inc., and Brian G. Fischer violated Section 5 by misrepresenting that: (1) purchasers can reasonably expect to earn a specific level of earnings (such as $10,000 per month); (2) no selling is required for purchasers to find customers; and (3) defendants will provide sales assistants, who have medical sales experience or contacts within the medical community, to find customers. In addition, the complaint alleges that the defendants violated the Franchise Rule by: (1) failing to provide prospective franchisees with accurate and complete disclosure documents within the time period required by the Franchise Rule; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

F.T.C. v. Parade of Toys, Inc., Civ. No. 97-2367-GTV (D. Kan.), filed July 25, 1997.

This case involves the sale of carousel rack display business ventures promoting the sale of licensed Disney and other trademarked products. The Commission's complaint alleges that Parade of Toys, Inc.; Wonderful Word of Toys, Inc.; Robert E. Bouckhout; Dennis Vaughn; and Megan Wall violated Section 5 by misrepresenting that purchasers can reasonably expect to earn specific levels of earnings (such as annual income of $50,000 - $100,000). The defendants allegedly also failed to disclose the costs associated with purchasing the business venture, including an initial "set-up" or "license" fee. In addition, the complaint alleges that the defendants violated the Franchise Rule by: (1) failing to provide prospective franchisees with a compete and accurate disclosure document within the time period required by the Rule; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

F.T.C. v. Steve Shelton, No. CV-N-97-00712-ECR (RAM)(D. Nev.), filed December 17, 1997.

This case concerns the sale of medical billing center business opportunities. The Commission's complaint alleges that Steve Shelton; Lynne Shelton; Gary White; Leslie White; National Electronic Healthcare Corp.; and Electronic Healthcare Products, Inc. violated Section 5 by misrepresenting that purchasers of a billing center can reasonably expect to earn substantial income. In addition, the complaint alleges that the defendants violated the Commission's Franchise Rule by: (1) failing to provide prospective franchisees with specific items of information required by the Rule, such as a complete and accurate disclosure of the names and addresses of franchisees and statistical information about the number of franchises terminated, not renewed, and reacquired by the franchisor; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

F.T.C. v. Stillwater Vending, Limited., Civ. No. 97-386-JD (D. N.H.), filed August 7, 1997.

This case involves the sale of candy vending machine business opportunities. The Commission's complaint alleges that Stillwater Vending Limited; Global Locating Services, Inc.; Joel Salvatore; and Jeffery Salvatore violated Section 5 by misrepresenting: (1) that investors could expect to earn specific levels of income; (2) that references would provide reliable descriptions of their experiences; and (3) that locators would provide profitable sites for the vending machines. The defendants also allegedly misrepresented the quality of the vending machines, the costs of locating the machines, delivery dates, and the amount and quality of the candy. In addition, the complaint alleges that the defendants violated the Franchise Rule by failing to provide prospective franchisees with the required disclosure document.

F.T.C. v. Summit Photographix, Inc., et al., Civ. No. 398-CV-0449-T (N.D. Tex.), filed February 19, 1998.

This case involves the sale of prepaid trading card and postcard business opportunities. The Commission's complaint alleges that Summit Photographix, Inc., and its officers, Daniel P. Kondos, John Lovelace, Bradley Douglas Highum and Bruce E. Campbell, violated Section 5 by misrepresenting that: (1) purchasers could reasonably expect to achieve a specific level of earnings; and (2) purchasers could reasonably expect to receive an exclusive territory.

FTC v. Telecard Dispensing Corp., et al., Civ. No. 98-7058 (S.D. Fla.), filed Sept. 29, 1998.

This case involves the sale of a business opportunity for "talking" telephone card vending machines and pre-paid phone cards. The Commission’s complaint alleges that Telecard Dispensing Corp., Stephen I. Tashman, Stephen M. Mishkin, Ernest F. Lockamy, Michael S. Dundee and Harris M. Cohen violated Section 5 by misrepresenting: (1) how much money purchasers can earn; (2) that purchasers will receive an exclusive territory for their vending machines; and (3) that the defendants will help purchasers locate their vending machines in high- traffic areas. In addition, the complaint alleges that the defendants violated the Franchise Rule by failing to provide potential purchasers with: (1) a complete and accurate basic disclosure document; and (2) an earnings claim document substantiating their oral and written claims.

F.T.C. v. Touchnet, Inc., et al., Civ. No. C98-0176 (W.D. Wash.), filed February 11, 1998.

This case involves the sale of Internet consulting, prepaid phone card, and pay-per-call 900 number business opportunities. The Commission's complaint alleges that Touchnet, Inc., Touchtone Telecommunications & Advertising, Inc., Eric Carino and Melissa Carino violated Section 5 by misrepresenting that purchasers of these opportunities can reasonably expect to make thousands of dollars a month. In addition, the complaint also alleges that the defendants violated the Franchise Rule by: (1) failing to provide prospective franchisees with a basic disclosure document; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

F.T.C. v. Unitel Systems, Inc., Civ. No. 3-97CV1878-D (N.D. Tex.), filed August 1, 1997.

This case involves the sale of carousel display rack business ventures promoting licensed Disney and other trademarked products. The Commission's complaint alleges that Unitel Systems, Inc. (d/b/a Universe of Toys); Roger Kenneth Frisch, Jr.; Delaney Leon Hinton; Baljeet S. Anand (a/k/a Bill Singh); and Harmit S. Anand (a/k/a Sonny Singh) violated Section 5 by misrepresenting: (1) that purchasers can reasonably expect to achieve specific level of earning; and (2) the authenticity of company-supplied references. The Complaint also alleges that the defendants violated the Franchise Rule by: (1) failing to provide prospective franchisees with accurate and complete disclosure documents within the time period required by the Rule; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

F.T.C. v. Raymond Urso, No. 97-2680, CIV-Ungaro-Benages (S.D. Fla.), filed August 18, 1997.

This case concerns the sale of greeting card and perfume display-rack business opportunities. The defendants are Raymond Urso; Bernard Koenig (a/k/a Bernie King); Marcia Koenig; David Bennett; Jeffrey Shoobs; Scott Gunn (a/k/a Scott Goodson or Scott Gates); Susan Perkits; Bridgeport & Associates, Inc.; Prestige Advertising Inc.; National Bureau of Better Business, Inc.; and Maria K Associations, Inc. The Commission's complaint alleges that some defendants misrepresented: (1) the earnings level purchasers can reasonably expect to achieve; (2) the authenticity of company-supplied references; and (3) the availability and profitability of locations in a particular geographic area. The complaint also alleges that some defendants misrepresented that the National Better Business Bureau is an independent organization that provides objective and reliable reports about the members' business practices. In addition, the complaint alleges that some of the defendants violated the Franchise Rule by: (1) failing to provide prospective investors with a complete and accurate disclosure document within the time period required by the Franchise Rule; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

F.T.C. v. Vendors Financial Services, Inc., et al., Civ. No. 98-N-1832 (D. Colo.) filed August 24, 1998.

This case involves the sale of snack and soda vending machine business opportunities. The Commission's complaint alleges that Vendors Financial Services, Inc., also d/b/a T & H Management, Inc., Samuel John Levine, Jay Samuel Levine and Tom Davis (a/k/a Richard McLaughlin) violated Section 5 by misrepresenting that: (1) purchasers can reasonably expect to achieve a specific level of earnings or that the amounts claimed are average estimates of the earnings purchasers can reasonably expect; (2) defendants provide purchasers with exclusive territories; (3) defendants provide references who reliable and accurate descriptions of their experiences with defendants' business venture; (4) defendant Tom Davis represented that his name was Richard McLaughlin, and that as a reference for defendants, he provides purchasers with reliable and accurate descriptions of his experience with the business venture; and (5) the locators recommended by defendants are typically successful in placing purchasers' vending machines in profitable locations. In addition, the complaint alleges that the defendants violated the Franchise Rule by: (1) failing to provide prospective franchisees with accurate and complete disclosure documents within the time period required by the Franchise Rule; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

United States v. Global Toys Distributors, Inc., Civ. No. 97-4350 Nickerson, J. (E.D.N.Y.), filed July 30, 1997.

This case concerns the sale of carousel display rack business ventures promoting licensed Disney and other trademarked products. The Commission's complaint alleges that Global Toy Distributors, Inc.; Richard D. Patetta; and George J. McDermott violated the Franchise Rule by: (1) failing to provide prospective franchisees with a compete and accurate disclosure document within the time period required by the Rule; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

United States v. Robert M. Oliver, Civ. No. 5:98cv00160/RH (N.D. Fla.), filed June 8, 1998.

This case involves the sale of franchises for the operation of local affiliates of the "U.S. Consumer Protection Agency." The Commission's complaint alleges that Robert M. Oliver, d/b/a U.S. Consumer Protection Agency and Consumer Protection Agency of Bay County, violated Section 5 by misrepresenting that the defendants are agencies of the United States or state or local governments. In addition, the complaint alleges that the defendants violated the Franchise Rule by: (1) failing to provide prospective franchisees with accurate and complete disclosure documents within the time period required by the Franchise Rule; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

United States v. PVI, Inc., Civ. No. 98-6935 (S.D. Fla.), filed September 1, 1998.

This case involves the sale of digital photo sticker vending machine business opportunities. The Commission's complaint alleges that defendant PVI, Inc., d/b/a Photo Vend International, violated the Franchise Rule by: (1) failing to provide prospective franchisees with accurate and complete disclosure documents within the time period required by the Franchise Rule; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

United States v. QX International, Inc., et al., Civ. No. 398-CV-0453-D (N.D. Tex.), filed February 20, 1998.

This case involves the sale of display rack distributorships for automobile engine lubricant products. The Commission's complaint alleges that QX International, Inc., and Anthony F. Francis violated Section 5 by misrepresenting that: (1) purchasers could reasonably expect to receive a specific level of earnings or that the amounts claimed were average estimates that purchasers could reasonably expect to achieve; (2) references furnished by the defendants had actually purchased the opportunity and could provide reliable descriptions of their experience with it; (3) only one distributorship would be sold in a particular territory; (4) that recommended locators were typically successful in placing display racks in profitable locations; and (5) that defendants would provide significant advertising assistance, including a national ad campaign, ads ready for placement in newspapers and point-of-sale videos promoting the products. In addition, the complaint also alleges that the defendants violated the Franchise Rule by: (1) failing to provide prospective franchisees with a basic disclosure document; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.

United States v. Toys Unlimited International, Inc., Civ. No. 97-08592 CIV-Highsmith (S.D. Fla), filed July 29, 1997.

This case concerns the sale of carousel display rack business ventures promoting licensed Disney and other trademarked products. The Commission's complaint alleges that Toys Unlimited International, Inc.; Robert G. Garrow; and Andrew B. Moss violated the Franchise Rule by: (1) failing to provide prospective franchisees with accurate and complete disclosure documents within the time period required by the Rule; and (2) making earnings representations without providing prospective franchisees with the required earnings claim document.