Entre Computer Centers Inc. took a major step toward ending two years of legal troubles Friday. The McLean-based computer retailing chain announced that it had settled six breach-of-contract lawsuits filed against it by disgruntled former franchisees.
The settlements come just one week after Entre won a key battle in federal court in Alexandria against a former franchisee from New England, and company officials expressed optimism that eight other franchisee lawsuits that remain against Entre could now be settled quickly.
Exact terms of the agreements were not disclosed by either Entre or lawyers for the franchisees. But Entre officials said the settlements were "highly favorable to Entre." At the same time, they said, the settlements were "handled in a manner that would not put any of the plaintiffs out of business." In last week's court victory, Entre -- which had made counterclaims against the former franchisee who filed the suits -- was granted a $116,000 award by a jury, in addition to a pretrial award of $257,000.
"These courtroom victories and the nature of this settlement demonstrate that suing Entre is not profitable," said Bert Helfinstein, president of Entre.
Entre has been plagued by lawsuits since the computer slump of 1986 decimated Entre's nationwide network of 250 computer stores and forced the firm to make controversial changes in its relationship with franchisees. In 1986, the company spent $8.4 million -- more than 12 percent of its revenue -- fighting more than a dozen suits, and last year it spent an additional $3 million in legal costs.
A string of court victories, however, beginning last June with a federal court's reversal of most of a $4.9 million judgment against Entre, has brightened the firm's prospects. The company has also made a speedy return to profitability, rebounding from 1986 losses of $8 million to a profitable year in 1987 and first-quarter profits this year of $1.2 million.
But while company officials are bullish on the firm's future, Michael D. Hausfeld, a Washington attorney who has handled a number of the Entre suits, including the ones settled Friday, said more litigation may be in the offing.
"There appears to be a great many dissatisfied people out there," he said. "I've done a lot of franchise work and I've come across very few franchisors who have created the animosity and problems Entre has."