It is quite possible that Huston foresees a Quick Lube victory in the suit, but even this would not necessarily give clear insight as to what will be discussed in the meeting. It is possible that Huston will attempt to expand its acquisition, purchasing Quick Lube (and in effect rejoining the companies) and thus becoming a major operator as well as franchisor. It is also possible that Huston simply wants to avoid what it sees as a losing suit and is going to attempt to address any grievances brought up by Hegert and Quick Lube.
Of course, Huston could also predict a win for itself in the suit, and though this might not be as expected Hegert should be prepared to enter a meeting where this attitude is taken. The most useful tool Hegert has at his disposal is information, and it doesn't hurt that this information shows Quick Lube to be a very profitable and actually a highly solvent company, which has very real and very large implications on the potentials for the company with or without the lawsuit. Quick Lube could sell of certain assets in order to discharge its debt to Huston quicker and ultimately sever ties with the company, and if the Quick Lube prevails in a contractual or an anti-trust lawsuit, it could also potentially become a fully independent company operating not as a franchise, but as a wholly owned chain (Grimes 2010). If Hegert is prepared with this information and the data that supports it, he will make a strong showing in the meeting with Huston's board regardless of what their position is.
Valuation
Much of the strength in Hegert's position is derived from the fact that Quick Lube is a valuable company in its own right and as a revenue generator for Super Lube and thus now Huston Oil. Quick Lube makes approximately two million dollars a month in gross sales, seven percent of which -- one-hundred and forty thousand dollars -- goes to the franchisor, now effectively Huston Oil. Any substantial dent in these figures or the threat of the loss of this revenue to Huston Oil would likely be reacted to strongly, and it also provides a compelling incentive for Quick Lube to...
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