Group of licensee stores sues Power Marketing Direct
Suit accuses company of using ‘false information' to recruit dealers
Furniture Today Staff -- Furniture Today, March 17, 2010
COLUMBUS, Ohio — A group of licensee stores of Power Marketing Direct is suing the company, its affiliate PMD Furniture Direct and several PMD executives, claiming they used "false and misleading information" to recruit dealers.
In a March 1 filing in the Common Pleas Court of Franklin County, Ohio, the 23 plaintiffs sued the two companies, PMD President and CEO Jeff Hosking and three other executives.
The suit also claims that the plaintiffs "never achieved anywhere near the success represented to them by PMD and its agents," despite following the retail organization's business plan.
Power Marketing Direct is made up mainly of independently owned licensee stores that operate on a program designed by the Columbus-based company. All the stores in the organization buy product through PMD.
Last year, the leaders of PMD established PMD Furniture Direct as a separate business to operate a new franchise program for stores, aiming to convert PMD licensees to franchisees and sign up new franchisees.
In separate statements, PMD and PMD Furniture Direct said the lawsuit and its allegations had no merit and promised a vigorous defense. They have filed a motion to have the case dismissed, and have sued the plaintiffs' attorney, Caroline Worley, claiming defamation and interference with the companies' business.
PMD said that "each plaintiff went through a lengthy interview process and chose to own their own business and be a Power Marketing Direct licensed dealer." The company added, "Power Marketing Direct never promises that every licensed dealer will earn a certain income," although licensed dealers have spoken about their financial success.
PMD was listed at No. 83 on Furniture/Today's Top 100 U.S. Furniture Stores ranking last year, based on estimated 2008 sales of $65.7 million at 101 stores.
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