Franchise Amends Lawsuit Against Blockbuster

Memphis Daily News reports that Southern Stores Video, a Blockbuster franchise, has expanded a breach of contract lawsuit against Blockbuster to include the Movielink acquisition.

Southern Stores contends that by preparing to pipe video rentals directly into its customers' homes, Blockbuster has undercut its local franchise agreement. In other words, if customers are given the option of downloading movies straight to their home computers or televisions, there's less of a need to make a trip to the video store to do the same thing.

Already, Blockbuster has instituted programs and promotions over the past few years that have had a negative effect locally, the Southern Stores lawsuit claims. In 2004, for example, Blockbuster began selling and renting videos via the company's Web site, www.blockbuster.com.

The local company pays Blockbuster $2 million a year under an exclusive license agreement.

Comments

[Old Timer Too]

For $2 million a year, I would expect the "exclusive" part to be all-inclusive. BB may find itself on the losing end of that one (though I'm no atty). I wonder how my B&M locations are impacted. That's a horribly high price to pay per year for using someone's name and advertising.

[noe638]

Now they are testing dvd kiosks. I wonder how that will work out with the franchises?