Dear friends and fellow store owners,

During the last few weeks significant changes have taken place, not only in the structure of the management of the BBOA, but also within its board of Directors and the direction and objectives of our Association.

If you will bear with me I will describe the dilemma that your Board has attempted to face and resolve.

We estimate that among the total number of true members (i.e., those that had paid their dues) the reasons for joining our organization were varied; however, two primary reasons emerged as dominant.

1. Litigation: To litigate under some form of Class Action against MBE/UPS and to seek change and damages.
2. Negotiation: To seek (building on the strength of Association numbers, public opinion and negotiations), the restructure of the Gold Shield business model and the cessation by UPS of business practices that have resulted in so much financial distress to a large percentage of the Network.

Polling extensive conversations and emails from members, has revealed that the majority of members and 7 out of 9 Directors supported Negotiation., while many members and 2 Directors support Litigation. It is significant that one of the two Directors, after deliberation and consultation with attorneys has decided to vote in favor of the choice of the majority, namely Negotiation.

In view of the above: we sought outside help, namely legal experts and from organizations experienced in Franchise law and practices.

As you probably are by now aware, last week the Board of Directors met with the National Association Management Group. Our purpose was not only to engage experienced management for our organization, but also to seek the offering of services that would entice a majority of the network to join our Association. The following are the results and conclusions of said deliberations:

• NAMG, being adamantly opposed to litigation, will not manage our organization. In fact, Frank Capaldo, CEO of NAMG, has a meaningful saying that he firmly believes in: the worst settlement is better than the best law suit.”
   
• The staff of NAMG concluded that the present business model under which we operate is not viable, and the longevity of our franchise Network is questionable.
   
• NAMG will continue to offer services through the BBOA as advertised and has plans for additional services in the future. A Credit Union was mentioned.
   
• The BBOA must choose which set of objectives to follow among the two major choices mentioned above. In view of the conviction of the majority of the Board and the majority of our membership, we chose to pursue continued negotiations and, (short of a law suit), at this time, to pursue any and all means to achieve our goals. To emphasize this choice we decided to modify our Mission Statement to read, “To improve, protect and ensure the economic well-being of the entire network of MBE and UPS stores through an independent unified voice”
   
• We must increase our membership in order to increase our “clout” and forcefully affect change.
   
• Focus on the unfair practice by UPS of levying royalties on shipping revenues which include their cost to us as well. (i.e., double dipping)
   
• We must bring pressure to bear on the Area Franchisees to discontinue the sale of new stores in areas that are already saturated. Also to stop the practice of reselling stores that have gone out of business and claiming those as new sales for the purpose of making their numbers look good. (and their deceptive claim that the Network is not only doing fine but growing)
   
• Build a Vendor network that will provide materials at competitive prices and financial arrangements that benefit only the store owners.
   
• Build on the favorable communication between Stuart Mathis and our Board relative to the “Toys for Tots” program, to continue a dialogue and to develop mutual trust.
  
  At the conclusion of the planning sessions, a special meeting of the Board of Directors was held during which several actions were taken.?
   
• Accepted the resignation of Larry Bowdoin as President and a member of the Board. Larry has decided to pursue the former of the two sets of objectives cited earlier, namely Litigation. Another Board member after careful consideration of legal alternatives now supports the objectives as defined by the Board.
   
• Appointed Mike Rodriguez to continue as Chairman and assume the responsibilities of Chief Executive Officer of the BBOA.
   
• Decided that the Forum will become entirely private and for the exclusive use of its members. We have received much email commentary from our members on this decision, some in favor some opposed, however the majority are in favor. Many of our members noted the remarks and comments made, (mainly by non paying members), and have voiced their objection to subsidizing those who would not commit to the Association.
   
• Decided that we would offer (via our Web site), weekly short notices and news as well as a more detailed monthly Newsletter.
   
• Decided that we will take the necessary steps to expand our relationships within the national franchisee community (i.e. franchisees other than MBE/UPS stores). For example the American Association of Franchisees and Dealers.
   
• Decided (assuming adequate financial resources), to hire a Marketing/Communications consultant that will aid us in presenting our positive goals and mitigate negative rumors and perceptions, through the media, and to help us conduct regional meetings for the purpose of recruiting new members and consulting with the membership.

We urge all our members to join us in expanding our numbers, keeping in mind that “size counts” when dealing with MBE and UPS. We must convince all those undecided store owners that our organization is committed to represent the interests of all the stores regardless of their STR operating level.

One of our member critics, who apparently favors Litigation, made the following comment to me in a recent email: She wrote, “do you realize how many stores are going to go under while we try to negotiate with UPS?” Our response to her comment is: Do you realize how many stores are also going to go under while a class action lawsuit is organized and yields uncertain results? Such a lawsuit would most likely cost each store approximately $300 per month as compared to the results we are convinced we can achieve for $300 per year. Which of the two is the greater gamble?

Please accept our heartfelt thanks for your support and patience. Remaining united we can and will succeed.

Best regards from the entire Board of Directors and our good wishes.

Board of Directors
The Brown Board Owner’s Association