3/29/2010 10:57:00 AM Little Sunshine's franchisees split off Trademark infringement is at the crux of the breakup; day care franchisor seeks $200K, while countersuit is filed
Rochette Dahler is suing two former franchisees, alleging they were months behind on royalty payments.
Springfield daycare franchisor Little Sunshine’s Enterprises Inc. has filed federal trademark-infringement lawsuits against two former franchisees, and the defendants have responded with counterclaims.
Two suits in U.S. District Court for the Western District of Missouri name Springfield entities Paschke Enterprises LLC and Brodersen Wyrsch LLC as defendants, and seek a combined $200,000 for alleged trademark infringement by the franchisees, which have since dropped the Little Sunshine’s name by court order.
“They initiated a cooperative royalty strike,” said Little Sunshine’s Enterprises owner Rochette Dahler, claiming the franchisees in August stopped paying her company’s 6 percent royalty fee, which amounted to $2,500 to $4,500 per month.
Paschke Enterprises operates Storybook Children’s Academy in south Springfield, and Brodersen Wyrsch operates Pinnacle Children’s Academy in Rogers, Ark.
The defendants’ countersuits allege fraudulent and negligent misrepresentation, rescission of franchise agreements, breach of contract, breach of implied covenant of good faith and fair dealing, and violation of Missouri Merchandising Practices Act. The counterclaims request “fair and reasonable” damages and fees, and a jury trial.
Attorney Gail Fredrick of Fredrick, Rogers & Vaughn PC is representing the defendants. “I really don’t want to say too much. We’re just getting ready to do some depositions,” Fredrick said. “The action speaks for itself.”
Dahler suit details The first suit, filed Dec. 16, names Paschke Enterprises, Little Pas-Til’s LLC, Cary A. and Colleen E. Paschke, James R. Tillman and Jamie Fleetwood as co-defendants. Paschke Enterprises opened its day care, 201 E. Cardinal St., as Little Sunshine’s Playhouse in June 2007.
The second lawsuit, filed Dec. 30, names as defendants Brodersen Wyrsch, Chad and Jennifer Brodersen, John A. and Cindy S. Wyrsch, who opened a Little Sunshine’s franchise in Rogers, Ark., in April 2008.
District Judge Richard Dorr issued a partial injunction Feb. 23 against the defendants that forced the day cares to change their names.
“So far, the judge has seen things our way,” Dahler said, adding that the two day cares “continue to be in breach of federal trademark law because, in spite of the name change, they continue to use Little Sunshine’s signage, stationery, etc.”
Dahler personally operates two Little Sunshine’s Playhouse centers, 2826 W. Chestnut Expwy. and 2937 S. Claremont St., and franchisee Joyce Harrington runs the third location, 4910 N. 21st St. in Ozark. Dahler founded the concept in 2002 and began selling franchises in 2005.
Paschke counterclaim The counterclaim filed by Paschke Enterprises makes several claims against Dahler, among them that Dahler was not available to assist with the operation of the facilities, that she moved to Hawaii and was not available to provide support, and that she made false representations regarding Paschke Enterprises’ Cardinal Street location.
Financial information regarding Dahler’s Chestnut Expressway facility was provided to the defendants to “evaluate the potential aspects of purchasing the franchise in Springfield and Chesterfield,” according to the counterclaim.
Dahler prepared a business plan for operating a Little Sunshine’s Playhouse facility that the counterclaim says “misrepresented the number of children that would be enrolled in both locations as 80, when in fact the maximum licensed capacity was 72.”
The counterclaim also states Dahler misrepresented income generated from certain government programs, including subsidies for low-income families, food reimbursements and grants, which were all unavailable at the Cardinal location.
The counterclaim alleges that the Cardinal location “has never made profit and has experienced substantial losses since beginning operation.” It also alleges Little Sunshine’s has failed to live up to the franchise agreement terms by failing to send an experienced school administrator to the Cardinal location for a week before and two weeks after it opened; failing to assist with grant writing; and failing to make Little Sunshine’s corporate staff accessible.
Paschke claims to have invested $435,000 in the Cardinal location and signed a $10,500 monthly lease. Eight years remain on the lease with landlord Tillman, according to the counterclaim.
However, Dahler said she has signed a contract to purchase the land and building occupied by Paschke Enterprise’s day care from Tillman.
The next hearing in the case is scheduled for April 14.
