Newspaper article St Louis Post-Dispatch (MO)

Taco Bell's Owners Can't Find Their Customers

Newspaper article St Louis Post-Dispatch (MO)

Taco Bell's Owners Can't Find Their Customers

Article excerpt

Where's the people? That's what the owners of a Taco Bell asked one of the country's biggest market research firms.

A group of St. Louis County investors has sued Equifax Marketing Decision Systems Inc., part of an Atlanta firm that sells demographic studies. The investors, led by David Freese, built a Taco Bell in Decatur, Ill.

The restaurant doesn't perform as well as some other Taco Bells that the group owns. The reason, according to the suit, is faulty research by Equifax.

Before buying the land for the Taco Bell, Freese's group paid Equifax for a 1990 marketing study. Equifax reported on population, both historic and projected, within a 1-mile and 2-mile radius of the restaurant site.

In 1993, with its Taco Bell open, the group tried to sell off a portion of its site. The buyer's research turned up much lower population numbers than Equifax had provided in 1990.

So Freese's group commissioned another study by Equifax. The 1993 report gave much different numbers from the 1990 one, both historic and projected.

For example, in August 1990 Equifax reported that the 1980 census showed 10,885 people living within 1 mile of the Taco Bell site and 38,459 within 2 miles. In October 1993, Equifax reported that the 1980 census showed 2,774 people within 1 mile and 11,044 within 2 miles.

Estimates of the 1990 census and projections for 1994 contained similar disparities. In each case, the 1993 Equifax report showed less than one-third the population of the 1990 Equifax report.

Equifax could not be reached for comment Friday.

Freese's group says it's losing $50,000 a year in lost profits on the Decatur Taco Bell. Assuming a 20-year life expectancy for the restaurant, the investors are claiming $1 million in damages.

Mayer Klein of Newman, Goldfarb, Freyman, Stevens & Klein filed the suit in St. Louis Circuit Court. He said it's an unusual case because proof that the Equifax report was faulty has been provided by Equifax itself.

"They're the leaders," Klein said. "You've got to stand behind your work."

*****

BLOOD FIGHT: The American Red Cross has been accused of restraint of trade when it comes to selling blood to hospitals.

Life Line PBC Inc., which collects blood for sale to area hospitals, argues in a St. Louis County Circuit Court suit that Red Cross changed its contract with hospitals in "an attempt to unlawfully monopolize the trade" of blood supplies.

Attached to the suit is a copy of a modification, effective March 6, to the Red Cross "Full Service Agreement." It states that the prices in the contract assume that Red Cross is "the sole supplier of blood components to Hospital."

If the hospital buys blood from another supplier without permission from Red Cross, the hospital has to pay to Red Cross 50 percent of what the hospital would have paid Red Cross for the blood. …

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