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Two Largest Geeks on Call America, Inc Franchises File for Chapter 11 Bankruptcy Protection


RESTON, VA. (January 27, 2009) Two of Geeks on Call America, Inc’s largest franchises: Barber & Phelps, LLC and Bluemark, Inc. filed for Chapter 11 Bankruptcy protection on January 23, 2009. Reasons cited by Mr. Phelps, President of Barber & Phelps, for bankruptcy protection included “ineffective advertising, unwieldy 11% royalty, poorly executed changes away from the well known Geeks on Call® brand and the weak economy”. Mr. Phelps, once touted by the franchisor as one of the most successful owners in the system, operates a total of 20 units in Washington DC, Virginia, Maryland and Illinois. Mr. Phelps has already closed units in Massachusetts, New York and Connecticut within the last year. In an interview with Franchise Times Magazine Mr. Phelps stated that his revenues went from $1.6M in 2004 (with 10 units) to approximately $800K in 2008 (with 20 units); a roughly 75% reduction in average sales per territory over the last 4 years while franchise expenses nearly doubled.

Kamrul Khan, President of Bluemark, Inc., operates a total of 18 units in Maryland and Virginia. Mr. Khan was forced to give back a total of 17 units in New York, New Jersey and Connecticut citing lack of advertising, poor brand recognition and an absence of back end systems to support the franchisees. According to Mr. Khan, “GOCH failed to provide the basic tools necessary to manage a multi-unit business”. Mr. Khan indicated that his revenues went from $1.1M in 2004 (with 8 units) to approximately $800K in 2008 (with 18 units).

Phelps and Khan are also plaintiffs, along with 8 other franchise owners that have filed suit in either State or Federal court against Geeks on Call America, Inc. / Geeks on Call Holdings, Inc. alleging numerous breaches to the Franchise Agreement.

Geeks on Call America, Inc. is a wholly owned subsidiary of Geeks on Call Holdings, Inc. (OTCBB Ticker: GOCH). Geeks on Call® is a registered trademark of Geeks on Call America, Inc.


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