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CD Warehouse Franchisees File Demand -- Want Out of CD Warehouse System

9 Oct, 2001 By: Hive News

CD Warehouse Inc., theOklahoma City franchisor served with a shareholder derivative suit last week, now faces more franchisee litigation.

CDWI franchisees Paul and Peggy MacDougall filed a Demand for ArbitrationMonday, requesting to be released from their franchise agreements. The MacDougalls, who were CD Warehouse's "Operator of the Year" in 1998, operate three of CDWI's top 20 stores in sales volume.

In their demand, the MacDougalls state the franchisor has failed to provide support and services for royalties paid. "We've been promised a new POS software system for four years, and they haven'tdelivered," said Paul MacDougall, "and that is just one of the promises they have failed to act upon. At this point, I see no advantage in being part of the CD Warehouse system."

This filing is the latest in a series of disputes between CDWI and its franchisees. CD Warehouse has seen their store count drop from over 330 last year to 266 this month.

The MacDougalls own and operate CD Warehouse franchises in Cape Girardeau, Mo., Carbondale, Ill. and Paducah, Ky.

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