Court fight creates a thorn for Wesley Berry Flowers
June 23, 2015 at 1:17 pm #11564
Court fight creates a thorn for Wesley Berry Flowers
Photo by JOHN SOBCZAK In the early 1990s, Wesley Berry Flowers saw a growth opportunity not in storefronts but in e-commerce.
Thirty years ago, Wesley Berry Florist Inc., then a small, family-owned company, sold its first franchise.
It went on to establish 30 franchises across five states before selling most of them in the 1990s and launching an e-commerce business in 1994.
From the archives: Wesley Berry Florist starts franchising; sells first (June 24, 1985)
Today, the family operates one of the larger online floral businesses in the U.S. through FlowerDeliveryExpress.com, with a single franchise left in Canton Township, plus four brick-and-mortar stores in metro Detroit operating as Commerce Township-based Wesley Berry Flowers.
Under the Wesley Berry Flowers name, the combined businesses ranked No. 1,755 on Inc. magazine’s 2014 list of the 5,000 fastest-growing companies, with $40.2 million in reported revenue for 2013, up from $11.9 million in 2010.
FDE’s growing footprint — with deliveries in 152 countries and a network of tens of thousands of florists filling those orders — has put it into conflict — and court — with florist giant Teleflora LLC.
FDE had been a member of the Teleflora network going back to the 1950s and used its services for order fulfillment and credit card processing. But more recently, the two have sparred over issues tied to a large number of refunds to credit card transactions Teleflora considers questionable.
Teleflora cut Wesley Berry from its floral network in April, and lawsuits filed by each side ensued.
Wesley Berry subsequently dropped a Detroit case filed in federal court in April against Teleflora. In the meantime, two cases filed by Teleflora in May in U.S. District Court in California are ongoing.
Kaveh Kashef, a litigation partner at Clark Hill PLC in Birmingham representing Wesley Berry, said the relationship between the two companies has broken down primarily because “as Wesley Berry has grown, Teleflora sees us as a competitor in their treatment of us.”
A Teleflora attorney declined to comment.
Room for growth
As e-commerce started to unfold in the early ’90s, Wesley Berry Flowers could see the growth opportunity that came with it, said FDE CEO Wesley Berry II, who is also a principal Wesley Berry Flowers.
“The type of business we’re in, which allowed us to have same-day delivery across the country as a traditional brick-and-mortar shop, was the key component needed to be an Internet business.”
After seeing some of its competitors move online, Wesley Berry Flowers shifted from the franchise growth strategy to an e-commerce one.
“The good thing about it was nobody knew what to do because it was a new, Wild West type of environment,” Berry said. “Everybody had the same opportunity; you weren’t locked out because you hadn’t been doing it for 50 years.”
Today, Wesley Berry Flowers’ Michigan operations and online business employ 100 people in Michigan and 50 at a call center in the Philippines, Berry said.
Each day, the company deals with 5,000 to 6,000 people who are either placing orders or receiving flowers through the company from online orders, he said.
The majority of FDE’s business is in the U.S., but it does take a few hundred orders a day from other countries, Berry said, noting it works closely with 1-800-Flowers.com Inc. and Florists’ Transworld Delivery through FTD.com.
But doing business online has its pluses and minuses, he said.
Given the number of orders it processes online each year — roughly a million, according to Berry — and the breadth of its floral network, FDE sees its share of customer complaints.
“It’s unfortunate, and we do make every effort to follow up on issues. (But) we don’t have any greater failure rate on our orders than do any of our major industry competitors,” Berry said.
Recently, though, FDE has taken steps “to engage some greater levels of technology” to improve customer service, he said.
Clashes in court
Those customer service breakdowns are tied to the credit card refunds.
After Wesley Berry was dropped from the Teleflora network in April, it filed suit in Wayne County Circuit Court alleging that Teleflora didn’t make promised technology upgrades in its point of sale and e-commerce systems which would have helped reduce order fulfillment issues.
As a result, the lawsuit said, Wesley Berry had to design and implement its own technology “at great expense.”
The lawsuit also alleges Teleflora didn’t communicate chargeback issues in a timely manner and that the high rate of refunds was “a direct result of Teleflora’s failure to enforce its delivery requirements.”
Wesley Berry dropped that lawsuit after Teleflora filed its lawsuits.
“Rather than waste judicial resources, we decided to consolidate the cases,” Kashef said. “We are confident that the allegations brought forth in eastern Michigan will be reintroduced in California.”
The Teleflora lawsuits are seeking more than $21.5 million collectively in fees, interest and court costs from Wesley Berry and also accuse the company of false advertising, trademark infringement and unfair competition through, among other things, Wesley Berry’s alleged continued use of the Teleflora and Make Someone Smile trademarks Both cases will be heard in U.S. District Court for the Central District of California.
Wesley Berry has yet to file its response, but Kashef said, “We absolutely, unequivocally deny the claims.”
Sherri Welch: (313) 446-1694. Twitter: @SherriWelch
http://www.crainsdetroit.com/article/20150621/NEWS/306219975/online-business-blooms-for-wesley-berry-flowersJune 23, 2015 at 6:57 pm #11565
Wait.. Wesley Berry is located in Sarasota?
https://www.youtube.com/watch?v=CntAjDBxFtAJune 24, 2015 at 2:39 pm #11567
Sure would hate to be in the middle of this. The Resnicks have deep pockets in terms of $ and it will come down to who has the biggest war chest to spend with the lawyers.
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