Weddingpages Franchisees Announce That The Knot.com isFacing Advertising Sales Ban in Numerous Cities.
Business Editors
MINNEAPOLIS--(BUSINESS WIRE)--Oct. 25, 2000
A majority of franchise owners of Weddingpages, a regional bridal publication with local editions in more than fifty cities, have now filed motions for preliminary injunctions against The Knot.com (NASDAQ:KNOT) in the Supreme Court, State of New York. The suit alleges that the franchisees paid for the exclusive right to use the "Weddingpages" name in their territories. When The Knot, a start-up company that markets to brides over the Internet, purchased the franchisor of Weddingpages earlier this year, it required the franchisees to use "The Knot" name in addition to Weddingpages in their territories. "The Knot has now done an about-face and is threatening to take away our right to use The Knot name and to circumvent our franchise agreements by competing against us in our own territories," explained Todd Kabes, San Antonio franchise owner.
The request for injunctions stems from a lawsuit filed on August 14, 2000 by the franchise owners of Weddingpages. The suit seeks equitable relief and monetary damages, contending The Knot has committed fraud and misrepresentation; violation of state franchise registration and disclosure laws; breaches of the claimants' franchise agreements; violations of the implied covenant of good faith and fair dealing and numerous other violations of franchise and state laws. "The Knot's management has refused to acknowledge the franchisees' concerns or even meet with us. We had no choice but to file suit," Kabes said.
W. Michael Garner of Dady & Garner, P.A. counsel for the plaintiffs stated, "We are asking the Court to protect the fundamental bargain that the franchisees made -- that they would have exclusive rights to the Weddingpages and Knot names and concepts in their territories. The fact that The Knot bought out the franchisor does not change that." In a similar case last month, Dady & Garner obtained an injunction against a franchisor's internet sales into franchisee territories.
The Knot.com was launched in 1996 with Greenhouse funding from America Online (AOL). Additional investors include Hummer Winblad Venture Partners as well as QVC. With funds generated from a recent IPO, The Knot acquired Weddingpages Inc., in April of 2000 at a cost of 8.5 million. Weddingpages Inc., is recognized as the largest publisher of regional wedding magazines in the U.S.
For additional information please contact Mark Stevens, Phoenix franchise owner, 480-451-1059 or Todd Kabes, San Antonio franchise owner 210-545-3925 Ext. 22.
