Squamish Play N Trade has joined ranks with the legion of Play N Trade stores that have closed across Canada and the United States and is embroiled in a lawsuit with the California-based company.
The Squamish video gaming store closed on Labour Day weekend, much to the dismay of Donna Barker’s 14-year-old-son who, months before, had prepaid $174.19 for a game that was scheduled to be released that same weekend.
“We’d been there many, many times because we’ve got two kids,” said Barker, a Britannia Beach resident. “He [her son] put the deposit down on May 25 and the game didn’t come out until September.”
“It was supposed to be a midnight release everywhere... and we went the next day and there was a sign on the store that said ‘closed for inventory,’ which was really annoying because this big deal thing was happening in the gaming world.”
The sign instructed customers to check back after Labour Day.
“So we went back the day after Labour Day and that’s when the sign was different,” she said. “It didn’t say inventory anymore. It said ‘closed.’”
Less than two months before the store closed down, the website The Unhappy Franchisee revealed on July 19 that Play N Trade franchise owners had reported “widespread closure of the stores.”
Earlier, on March 23, the same website reported that allegations against Play N Trade — of fraud, franchise disclosure violations and a flawed business model — had been posted on numerous sites.
One comment went so far as to say that “anyone who buys a store at this point is just making a very large donation to their lawsuit/bankruptcy fund.”
After the closure of the Squamish store, Barker made some inquiries and discovered a Play N Trade store in Kitsilano had the same owner and had shut down around the same time.
Determined to secure a refund for her son, Barker called the Play N Trade head office in California.
Barker was told that the owner was Steve Merrick, that it was his responsibility to repay all those who had prepaid for the game and she was given Merrick’s cell phone number.
According to Merrick, however, he never owned the store.
“We were trying to buy the store from the previous owner who owned it here in Squamish and that fell through,” he said. “We never got a franchise. We paid for it.”
Merrick co-owns a company called Closet Genius with Chris Keene and is represented by David Wheeler, a business litigator in Southern California who is also Keene’s father.
Wheeler, who filed a claim with the California Department of Corporations on behalf of Closet Genius against Play N Trade within the past month, said he plans to “get back their money.”
In April 2009, California’s Department of Corporations suspended Play N Trade’s franchise marketing and sales activities in California after evidence of the corporation’s unethical business practices surfaced. Because Play n Trade was found in violation of multiple provisions of the California Franchise Investment Law, California franchise owners were given the right to cancel their contracts and be repaid the cost of their original investment.
In response, Play N Trade stepped up its PR campaign in 2010, continuing to tout the company as not only the largest video game franchise worldwide, but one of the fastest-growing franchise companies across all industries.
Michael Peterson, Play N Trade manager of franchisee relations, insists that, as a whole, the franchise is successful and does very well. But he was unwilling to discuss the situation surrounding the Squamish store.
“I can’t comment on anything that has to do with an ongoing litigation issues,” he said, “and as far as why stores have closed — each store has an individual story behind it and I’m not going to disclose what those are.”
“Typically, it’s something personal but we have many franchises in Canada and the United States that are doing very well and are very happy.”
Five stores are currently operating in B.C.: in Salmon Arm, Fort St. John, Duncan, Courtenay and Surrey. The Squamish and Kitsilano locations are two of three that have recently shut down. The third was in Richmond.
Barker said it took more than a month for the Play N Trade head office to reply to her but in the end they gave her son a $50 store credit to the Play N Trade store of his choice.
“I would like to be able to point a finger down at California and some head office that’s done wrong by little guys in Squamish,” she said, “because I’m self employed, I know what it means to be small business.”
Peterson advised others seeking refunds to contact the California office “and we would go from there.”