Atlas Enterprises, Inc.

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IN THE MATTER OF ATLAS ENTERPRISES, INC., ET AL.

CONSENT ORDER, ETC., IN REGARD TO THE ALLEGED VIOLATION OF THE FEDERAL TRADE COMMISSION ACT Docket 7122. Complaint, Ap1" 1958-Decision, Oct. 17, 1958 Consent order requiring sellers in Hopkins, Minn., of vending machines for cigarettes and other products, to purchasers including disabled, retired, and inexperienced individuals, to cease making, in newspaper advertising and by their agents, purported offers of employment to develop leads for sales; and to cease representing falsely the net profits to be- expected by purchasers, and help given in locating and securing profitable locations disposing of machines for dissatisfied customers, etc. Mr. B?'ocknw,n Horne supporting the complaint. l'rfr. Eugene C. lVann of New Prague, Minn., for respondents. INITIAL DECISION BY JOSEPH CALLA WAY HEARING EXAMINER The Federal Trade Commission issued its complaint against the above-named respondents on April 16 , 1958, charging them with having violated the Federal Trade Commission Act as set forth in said complaint.

After being served with the complaint respondents entered into an agreement, dated August 20, 1958, containing a consent order to cease and desist, disposing of all the issues in this proceeding without hearing, which agreement has been duly approved by the director and acting assistant director of the Bureau of Litigation. Said agreement has been submitted to the undersigned, heretofore duly designated to act as hearing examiner herein, for his consideration in accordance with Section 3.25 of the Rules of Practice of the Commission.

Respondents pursuant to the aforesaid agreement, have admitted all of the jurisdictional allegations of the complaint and agreed that the record may be taken as if findings of j urisdictional facts had been made duly in accordance with such allegations. Said agreement further provides that respondents waive all further procedural steps before the hearing examiner or the Commission, including the making of findings of fact or conclusions of law and the right to challenge or contest the validity of the order to cease and desist entered in accordance with such agreement. It has also been agreed that the record herein shall Order 55 F.

consist solely of the complaint and said agreement, that the agreement shall not become a part of the official record unless and until it becomes a part of the decision of the Commission, that said agreement is for settlement purposes only and does not constitute an admission by respondents that they have violated the law as alleged in the complaint, that said order to cease and desist shall have the same force and effect as if entered after a full hearing and may be altered, modified, or set aside in the manner provided for other orders, and that the complaint may be used in construing the terms of the order.

This proceeding having now con1e on for final consideration on the complaint and the aforesaid agreement containing the consent order, and it appearing that the order and agreement cover all of the allegations of the complaint and provide for appropriate disposition of this proceeding, the agreement is hereby accepted and ordered filed upon this decision and said agreement becoming part of the Commission s decision pursuant to Sections 3.21 and 25 of the Rules of Practice, and the hearing examiner accordingly makes the following findings, for jurisdictional purposes, and order;

1. Respondent Atlas Enterprises, Inc., is a corporation existing and doing business under and by virtue of the laws of the State of Minnesota, with its office and principal place of business located at 420 East Excelsior Boulevard, Hopkins, IVlinn. It sometimes trades as G. & E. Placement Service and as D.A. V. Distributors, Inc.

R. Zaun, 2. Individual respondents Gil R. Zaun and Edward Sr., are president and vice-president, respectively, of said corportion, and they formulate, direct and control its policies, acts and practices. Their business address is the same as that of the corporate respondent, and their home addresses are: Gil R. Zaun 1837 Edgewood Avenue, l\1inneapolis, Minn., and Edward Zaun, Sr., 1600 Hillsboro South, St. Louis Park, IVlinn. 3. The Federal Trade Commission has jurisdiction of the subject matter or this proceeding and of the respondents hereinabove named. The complaint states a cause of action against said respondents under the Federal Trade Commission Act, and this proceeding is in the interest of the public. ORDER It is ordered That respondents Atlas Enterprises, Inc. , a corporation, and its officers, and Gil R. Zaun and Edward R. Zaun A TLAS ENTERPRISES, INC., ET AL. 599 597 Decision Sr., individually and as officers of said corporation, and respondents' agents, representatives and employees, directly or through any corporate or other device, in connection with the offering for sale, sale or distribution of vending machines, in commerce, as commerce" is defined in the Federal Trade Commission Act, do forthwith cease and desist from representing, directly or implication:

1. That any offer is an offer of employment when, in fact the real purpose is to obtain purchasers of their machines. 2. That the purchase price of respondents' machines is secured, other than by the machines themselves. 3. That net profits in any specific amount will be realized by a purchaser of such machines, unless based upon known profits which are customarily earned by the operator of vending machines in the locality of the purchaser, taking into consideration the experience of the purchaser in operating vending machines and the character of locations to be secured by respondents. 4. That surveys have been made to determine locations which would prove profitable for the installation of such machines. 5. That profitable locations will be secured for a purchaser machines.

6. That, should a location for a purchaser s machine prove to be unprofitable, said machine will be relocated by respondents. 7. That locations secured will be '\within a reasonable distance of the purchaser.

8. That no selling or soliciting is required of the purchaser in the operation of such machines.

9. That purchased machines will be delivered without undue delay.

10. That a satisfactory credit-rating, employment stability or car ownership is required before the machines will be sold. 11. That the business of operating cigarette or any other vending machines is a stable one, or remains profitable during a depression, under all circumstances and conditions. 12. That respondents will resell or otherwise dispose of the machines sold by them in the event the purchaser becomes dissatisfied with the profit derived therefrom. DECISION OF THE COMMISSION AND ORDER TO FILE REPORT OF CO11PLIANCE The Commission having considered the hearing examiner initial decision herein, filed September 2, 1958, wherein the hear- Decision 55 F.

ing examiner accepted an agreement containing a consent order to cease and desist theretofore executed by the respondents and counsel in support of the complaint and entered his order in conformity therewith; and It appearing that through inadvertenee said initial decision recites that the complaint states a cause of action against the respondents under the Fur Products Labeling Act as well as under the Federal Trade Commission Act; and The Commission being of the opinion that this clerical error should be corrected:

It is ordered That the initial decision be, and it hereby is modified by striking from paragraph "3" of the findings, for jurisdictional purposes, the words "Fur Products Labeling Act and the, It is further ordered That the initial decision, as so modified shall, on the 17th day of October 1958 become the decision of the Commission.

It is further ordered That the respondents, Atlas Enterprises, Inc. , a corporation, and Gil R. Zaun and Ed\vard R. Zaun, Sr. individually and as officers of said corporation, shall, within sixty (60) days after service upon them of this decision, file with the Commission, a report, in writing, setting forth in detail the manner and form in which they have complied with the order contained in the aforesaid initial decision. TLANTIC TEXTILE CO. 601 Decision