Franchisees file legal action against Cardinal, MSI

June 12, 2006

More than 70 Medicine Shoppe franchise owners, representing 82 stores, have filed legal action against Medicine Shoppe International (MSI) and its parent company Cardinal Health. The action was filed on June 2 in Missouri through the American Arbitration Association.

Franchisees file legal action against Cardinal, MSI

More than 70 Medicine Shoppe franchise owners, representing 82 stores, have filed legal action against Medicine Shoppe International (MSI) and its parent company Cardinal Health. The action was filed on June 2 in Missouri through the American Arbitration Association. The franchisees include members of the Pharmacy Franchise Owners Association (PFOA), which is made up of 220 Medicine Shoppe and Medicap franchise owners. The franchisees cited MSI for failure to provide accounting of, and failure to perform, marketing and advertising obligations; breaches of licensee agreements; and MSI's continued use of a broken and archaic business model. They are seeking relief against Cardinal Health for "tortious interference with contractual relations, violations of unfair trade practice laws, and violation of antitrust laws." Medicine Shoppe said the firm cannot discuss the specifics of the claims, but stated, "MSI is committed to its system and its franchisees. We will continue strong efforts toward offering the programs and services our franchisees want and need." It added that the firm is holding a national meeting in early June where it will be "announcing many new programs and services that will help our franchisees succeed in a changing retail pharmacy atmosphere. These announcements should address nearly every concern raised in the demand for arbitration-all without the expense and distraction of a legal proceeding."

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