Motel Managers Training School, Inc. v. Gordon Merryfield

The record shows the following facts were uncontradicted:

Appellant Motel Managers Training School, Inc., (the School) owned and operated a vocational training school in Los Angeles, California. It was essentially a correspondence school but also offered with its correspondence lessons demonstrative instruction in a motel. In the Los Angeles area the School’s courses were sold directly to students. In other geographical areas it sold its courses through franchisees. The correspondence courses were made up at the School’s headquarters in Los Angeles and all lesson grading, diplomas, and assistance in job placement were handled there, whether or not the courses were sold directly or through franchisees. The School was headed by Mrs. Pearl Kay Yenuto, president, and on the staff were Ron Hibbard, director of franchises, Rudy Furst, franchise sales manager, and Fred Boyer, “counsellor” or “coordinator”.

After it conducted its own market research in the summer of 1962 in Chicago, Illinois, the School determined to establish a franchised school in Chicago, and advertised in the September 2, 1962, issue of the Chicago Tribune for an “Associate to direct local operation with very high…