A U.S. District Court jury in Alexandria awarded damages of $4.9 million to two franchisees of Entre' Computer Centers Inc., an international personal computer retail franchiser that had been charged with fraud and breach of contract.
In a jury trial, the two Entre' franchisees, David H. McMullen and Gary J. Fox of Kansas City, Mo., claimed that the Vienna-based company had awarded another franchise to the Kansas City, Mo., metropolitan area after promising them an exclusive franchise in that market last year.
Entre' officials said the decision is not final.
"The case is not over," said Steven B. Heller, president of Entre', which has approximately 260 franchised stores. "The judge has specifically reserved judgment on the question of whether the jury's verdict is supported by the evidence and a hearing has been scheduled for Feb. 28, 1986.
"Entre' strongly believes that the jury's verdict is not supported by the evidence and that Entre' will ultimately prevail," Heller said.
The verdict in favor of McMullen and Fox included $960,000 for breach of contract, $250,000 for fraud and $3.7 million in punitive damages, according to an attorney for the men.
The verdict comes at a time when the personal computer boom of the last several years has evaporated and demand flattened out.
Major personal computer companies -- including International Business Machines Corp., Apple Computer and Wang -- have reported declining sales growth. Moreover, the retail computer industry has been marked by recent acquisitions and consolidations as purchases have slackened.
"We went public at $12 a share," Heller said recently, "and since that time revenues have gone up by a factor of seven. The number of centers we have has gone up by more than a factor of four. Our profits have gone up by a factor of 13. And the stock is selling below the offering price. "You have to be disappointed in that," he said.
Like much of the personal computer industry, Entre', founded in 1981, has enjoyed a tremendous rate of growth. But the problems in the industry now may be particularly acute for Entre' because much of its rapid increase in revenue over the last four years has come from franchise growth.
During the 1984 fiscal year, 144 Entre' franchises were opened, tripling the franchise fee revenue.