LITTLE SUNSHINE'S PLAYHOUSE: Stormclouds, Franchise Lawsuits

Date AddedJune 06, 2010 10:11:46 AM

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Little Sunshine's Playhouse & Preschool franchise website welcomes visitors with a fairy tale:

"Once upon a time there was a happy place where children played in a kingdom of creative encouragement. Where Little Sunshine, Riley B and all their friends across the land grew by leaps and bounds in their magical home away from home."

However, the Little Sunshine's Playhouse fairy tale franchise has turned into a nightmare for both the fledgling franchisor and its early franchisees. The franchisor alleges two of her first franchisees refused to pay royalties and renamed their day care centers, but continue to use her trade dress. She is suing them for trademark infringement.

The franchisees accuse the Little Sunshine's Playhouse franchisor of not providing agreed services and abandoning them by moving to Hawaii.

Little Sunshine's Enterprises Inc. complaint against its franchisees

In "Little Sunshine's franchisees split off" the Missouri's Springfield Business Journal reports:

    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.

Rochette Dahler personally operates two Little Sunshine's Playhouse centers and franchisee Joyce Harrington runs the third location. Dahler founded the concept in 2002 and began selling franchises in 2005.

Franchisees' complaints against Little Sunshine's Enterprises Inc. & Rochette Dahler

The counterclaim filed by Paschke Enterprises makes several claims against Dahler:

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."

That Dahler "misrepresented the number of children that would be enrolled in both locations as 80, when in fact the maximum licensed capacity was 72."
That 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."

That Little Sunshine's Enterprises "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."

According to the Springfield Business Journal article, the counterclaim alleges that the Cardinal location "has never made profit and has experienced substantial losses since beginning operation."

Ain't no sunshine when she's gone...

Franchisee Paschke claims to have invested $435,000 in the once-franchised daycare location and has eight years remaining on a $10,500 monthly lease. However, her ex-franchisor and bitter courtroom enemy Dahler said she has signed a contract to purchase the land and building occupied by Paschke Enterprise's day care from the landlord Tillman.

Hell hath no fury like a preschool teacher - or franchisor - scorned.