Quick Lube Franchise Corporation

Quick Lube Franchise Corporation - QLFC 1 Quick Lube...

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QLFC 1 Quick Lube Franchise Corporation Frank Herget, one of the founding members of Super Lube, founded Quick Lube Franchise Corporation (QLFC). Herget used both equity from other Super Lube employees that left the franchisor to join the franchisee and debt to finance QLFC’s growth. The license agreement between Super Lube and QLFC stated that in exchange for QLFC using the “franchisor’s trade name, trademark, service marks, know-how, and method of doing business”,
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QLFC 2 Super Lube would perform “product development and quality assurance tasks”. The franchisee, QLFC, also pays Super Lube 7% of their royalties. However, by the late 1980’s Super Lube could not finance its growth and became debt ridden, to save the company they struck a deal with Huston, a major oil company. Huston bought 80% of Super Lube, which in turn made Huston the primary supplier of oil to QLFC, as well as their franchisor. QLFC filed a lawsuit against Huston on the grounds that there is a conflict of interest in Huston being both supplier and parent company to the QLFC franchise. Huston’s primary concern is stabilizing Super Lube, decreasing its debt so that the company can afford to grow. Herget’s primary concern is building the QLFC so that eventually it would have a public stock
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Quick Lube Franchise Corporation - QLFC 1 Quick Lube...

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