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to become a distributor for BMI. The financial outlay required
by BMI was $24,900, of which petitioner paid $12,500 initially,
and the remainder shortly thereafter. The activity involved the
placement of display stands, preferably in supermarkets, on which
the greeting cards were displayed for purchase, along with
brochures describing the telephone debit cards. A customer
desiring a telephone debit card would present the brochure at the
checkout counter, and the cashier would activate a telephone card
for a certain number of minutes allowable for telephone use. For
the $24,900 paid by petitioner, he was to receive display stands
to be placed at 12 locations, 2,400 telephone debit cards, and
4,800 greeting cards and envelopes. On the suggestion of BMI,
petitioner engaged the services of Silver Star Locating of
Arlington, Texas, to find suitable locations for the 12 display
stands. The cost for that service was $3,600. Petitioner made
one payment of $3,000. The agreement with Silver Star Locating
allowed for cancellation. However, if the agreement was
canceled, Silver Star Locating was entitled to retain 25 percent
of the $3,600 contracted amount. Petitioner elected to cancel
the contract, and, on June 7, 1994, Silver Star Locating refunded
$2,100 to petitioner, retaining $900 (or 25 percent of the $3,600
contracted amount) as a forfeited fee.
Problems also developed between petitioner and BMI. BMI did
not immediately ship the necessary merchandise to petitioner to
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