Postcards on the Edge
Portia Johnson and Kelly McCabe should've thought twice about partnering with a company called Five Finger. In 1994 the local entrepreneurs started a postcard advertising business that places racks of free cards in restaurants and other locations, and the next year they established a national network with two similar companies, Pik-Nik in Los Angeles and Five Finger in New York. The new partnership was called GoCard, and since then Johnson and McCabe have been doing business as GoCard/Chicago. But after leaving the network during an ill-fated merger attempt, the Chicagoans found that the president of Five Finger had trademarked the name GoCard for himself and was gunning for their local clientele.
Johnson and McCabe first saw postcard advertising in Europe, where the practice became popular in the early 90s: create a catchy visual image, reproduce it on thousands of cards with contact information on the back, put 20 different cards in a rack, and place the racks where people will take the cards. Voila--advertising. Johnson and McCabe helped introduce the cards in Chicago when they started On the House in 1994, offering artists, small businesses, cultural institutions, and national clients a relatively inexpensive way to advertise. The concept caught on not only with clients but with scores of restaurants: since 1994 Johnson and McCabe have expanded their local roster from 75 to about 175, offering each restaurant several thousand cards printed with its own ads as an incentive to display the racks.
From the beginning, says Johnson, they wanted to help local artists and arts groups; past clients include Tony Fitzpatrick, Marc Hauser, Famous Door Theatre Company, the Chicago Latino Film Festival, and Around the Coyote. While national liquor, media, and fashion advertisers pay $1,250 for a two-week distribution of 25,000 cards, Johnson and McCabe typically offer a 25 percent discount and flexible quantities to local artists and arts organizations. But to make their business more profitable, they knew they had to establish a national network so advertisers could reach customers in major markets.
In 1995 On the House joined forces with Five Finger and Pik-Nik. Initially the companies maintained their separate identities and ownership, but as the months passed, all three recognized the need to establish a common identity. That fall the three companies agreed on the name GoCard, and Five Finger president Alan Wolan filed a trademark application for the name. But the name was about all they had in common. While GoCard/Chicago continued to show a strong interest in local, low-margin advertisers, Wolan took off after major national clients. He explains, "You charge eight cents a card and print millions of postcards."
Concerned that their philosophy would set them on a collision course with GoCard/New York, Johnson and McCabe listened closely last spring when Network Event Theater, another New York-based postcard company, approached them about a possible merger. Armed with a letter of intent from NET to buy out GoCard/Chicago, Johnson and McCabe told Wolan they were leaving the network. But the buyout deal fell apart: Johnson says NET focused more on the college market, which didn't interest her and McCabe.
Suddenly the Chicagoans found themselves on their own again, and while they now say they're content with Chicago as a base of operations, Wolan is after their turf. Almost immediately after the NET deal fell through, the New Yorker hired a Chicago representative, Eileen Hagen, to sign up restaurants for his card racks, promoting mostly national clients like Tic-Tac, Bass Ale, and Clairol. At first Wolan operated in Chicago as FreeCard, but in the last couple of months he's begun calling his local operation GoCard, too close to GoCard/Chicago for Johnson and McCabe's comfort. What's more, Johnson and McCabe learned recently that the trademark application they thought Wolan had filed on behalf of all three companies was in fact filed in his name, ostensibly giving him the rights to the trademark. Johnson says she and her partner never checked the application: "We were partners, and rightly or wrongly, we trusted Alan."
Johnson and McCabe have initiated proceedings with the U.S. trademark office to have the filing voided; Wolan won't discuss the dispute in detail. "I am confident I am within my legal rights," he says, "and they are going to spend a lot of money on legal bills for nothing." Sanders McNew, an attorney counseling Johnson and McCabe, thinks otherwise: "What Alan is doing is a clear infringement of GoCard/Chicago's right to use the GoCard name
in Chicago." McNew thinks Wolan should pay GoCard/Chicago a fair-market price for its business (according to his estimate, the company is worth $100,000), use a different name in Chicago, or get out of the market altogether.
The two partners also claim that Hagen, Wolan's representative, told restaurateurs that GoCard/Chicago was going out of business and that Wolan's operation would be taking over for it. Wolan vehemently denies any such tactics. "I would immediately fire anyone who did that," he says. But Sergio Sanchez, general manager of the Twisted Lizard restaurant at Sheffield and Armitage, insists that Wolan's representative did make such statements. "They said they were the original GoCard and were going to take the place of GoCard/Chicago," he says. Johnson and McCabe claim they've been forced to call all their restaurant partners to explain the situation.
Neither woman believes that Wolan will walk away without a fight--by their estimate he's already placed his racks in about 90 Chicago restaurants. But they say they'll do whatever it takes to protect their business. "What Alan is doing is clearly designed to confuse the marketplace," says Johnson. She and McCabe plan to sue Wolan for interfering in their business. Many of their restaurant partners are rooting for the duo. "I have been with Portia and Holly since they began their company," says Sanchez, "and I believe in loyalty."
Art accompanying story in printed newspaper (not available in this archive): Portia Johnson and Kelly McCabe photo by J.B. Spector.