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RAINIER THEATER 605
tributor. Until the National Appeal Board shall render a majority decision this franchise shall in no wise be affected or modified by the application of the Exhibitor or Distributor as above provided.
Commentary: The particular problem confronting the Rainier Theater was one common to a great number of independent theaters. The development of chain theaters had led to an extension of the protection period, to the disadvantage of the independent. It also insured the affiliated theater a prior claim upon the product of the distributor with which it was most closely connected. Moreover, as a result of inter-chain buying relationships, a still further restriction was placed upon the supply of films available to the non-affiliated houses. The case suggests that reliance upon the productions of the several independent producers was not deemed satisfactory as a permanent policy.
The Allied States Franchise Agreement represented a very definite accomplishment on the part of a group of independent theater interests. It offered certain definite and obvious advantages to the smaller producer and to any producer who did not control his own theaters. It also gave very real advantages to the unaffiliated exhibitor; it insured him a substantial and reasonably definite quantity of product which, even though it might not provide for all his requirements, would give a background for his yearly program. Under the conditions prevailing, this was an accomplishment of major significance. Furthermore, the price for each picture was determined separately. This provision met an objection long raised against the sale of pictures in blocks, namely, that good pictures and bad were all lumped together and sold at a figure which did not give adequate consideration to variations in quality or box office value.
The franchise agreement did even more, because the total exhibition value was determined in conference between the distributor and representatives of the exhibitors, and this total figure was then broken down into specific allotments against each theater. This provision was clearly designed to prevent a distributor from placing a fictitious and arbitrary valuation on films to be sold to exhibitors who had committed themselves to purchase prior to the determination of a price. Finally, the agreement provided for a subsequent judicial review of the price charged each exhibitor should any such exhibitor feel that he had been unfairly treated. All these advantages offered the Rainier Theater real incentive to accept the agreement.
At the same time, the agreement presented in this case called for careful scrutiny and should not have been entered into without a full appreciation of its content. For one thing, by accepting the agreement the Rainier Theater would be definitely committed to exhibit