January 27, 2012
Window World, Inc.®, headquartered in North Wilkesboro, N.C., claims to be America’s largest replacement window company with stores and offices in more than 200 cities nationwide.
Window World has grown to more than 200 cities by selling what it termed “license agreements,” not franchises. In an October, 2011 letter to Window World “licensees,” Window World CEO Tammy Whitworth and Window World President Dana Deem admit that their “license,” according to the Federal Trade Commission (FTC) and some state agencies, actually meets the definition of a “franchise.”
Since Window World has not complied with franchise registration and disclosure laws (which includes providing prospective franchisees with a Franchise Disclosure Document, or FDD), Window World has in essence admitted to having sold illegal franchises for several years.
The letter offers Window World “licensees” one of two options: sign the new Window World franchise agreement and (assumedly) let Window World off the legal hook, or rebrand as an independent, and turn over all Window World manuals, forms and proprietary stuff. If a “licensee” opts for the latter, Window World will pay them back their initial fee minus any profit they derived from their business.
Window World “licensee” David Hampton and his Window World of Chicagoland, LLC (“WWC”) is opting for a third option: file a lawsuit in US District Court against Window World, Inc., Tammy Whitworth and Dana Deem.
According to the lawsuit:
This is an action for rescission and damages based on Defendants’ violations of the Illinois Franchise Disclosure Act, 805 ILCS 705/1 et seq. by, among other things, failing to register as a franchise under the Illinois Franchise Disclosure Act (“IFDA”) and making fraudulent representations and omissions in connection with the sale of an unregistered franchise. Plaintiffs also seek damages for Defendants’ breach of contract arising out of Defendants’ denial of Plaintiffs’ right of first refusal by establishing a new territory adjacent to Plaintiffs’ territory. As a result of Defendants’ wrongful conduct, Plaintiffs’ customer base has dwindled and the once thriving business has over night been devalued causing Defendants substantial monetary damages entitling them to recover damages and/or rescission under Illinois law.
David Hampton and Window World of Chicagoland, LLC are seeking rescission of the License Agreements and/or an award of damages, including their reasonable attorneys’ fees and court costs, in an amount in excess of $75,000, and for an award of punitive damages.
David Hampton and Window World of Chicagoland, LLC are represented by Alice A. Kelly of Chicago-based The Kelly Law Group, LLC.
Window World Franchise Lawsuit Documents (pdf format)
WINDOW WORLD Franchise Complaint (Legal Complaint)
Window World Letter to Franchisees (Exhibit C)
Window World Final Judgement & Consent Decree (Exhibit D)
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