The Termite Report: Shooting the Inspector Has Never Once Saved the House

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HORNSWAGGLED

Dispatches from the Deep End of Franchise Law ⚓ Episode XVIII ⚓ THE TERMITE REPORT Shooting the Inspector Has Never Once Saved the House

Sea Tow Services International, Inc. v. Tampa Bay Marine Recovery, Inc., et al. Case No. 2:20-cv-02877-WFK-SIL (E.D.N.Y.) • Year Six

A Word to the Fleet About the Backlash

We've heard the grumbling from the docks. Some of you in The Fleet are upset — not at what's happening inside your franchisor's wheelhouse, but at the people describing it. This newsletter, we're told, is "hurting the brand." Abby Jaeger's social media posts — posts describing her own family's litigation, in her own words, about public court filings — are "hurting the brand."

We'd like to address that head-on. So pull up a deck chair. We're going to tell you a story about a house.

The Parable of the House

Imagine you buy a house. It's a fine house. You love this house. Your life savings are in this house.

After you buy it, you get a home inspection. The inspector comes down from the attic, dusts off his knees, and tells you there's evidence of termites. You don't like hearing that. So you refuse to believe him — and you throw the inspector out.

Next, an exterminating company gives the house the once-over. They discover the infestation is worse than previously reported. They hand you a written report. And now you're enraged — because you feel this report has lowered the value of your house.

But did the report lower the value? Or was it the termites?

Either way, you ignore the termites and aim your anger at the report. Within a year, the house collapses from termite damage.

Here is the one entomological fact you need to survive in franchise waters: termites thrive when they are neither seen nor talked about. Silence is not a preservative. Silence is exactly what the termites need to destroy your investment.

This business — this brand — is your investment. If you don't believe the inspection report, don't shoot the inspector. Go into the attic yourself and shine a light on the facts. Every fact below carries a case citation so you can do exactly that.

A social media post is not hurting the brand. Here, plank by plank, is what the inspection actually found.

THE INSPECTION REPORT

Sixteen planks. Every one sourced to a public record. Questions, not verdicts — the verdicts belong to the courts.

Plank № 1

Sworn statements to the USPTO that a court proceeding didn't exist — while your own lawyer was litigating it . . . That hurts the brand.

On December 10, 1999, declarations were filed with the U.S. Patent and Trademark Office under 15 U.S.C. §§ 1058 and 1065 — the filings used to maintain trademark registrations and claim "incontestable" status. Those declarations, prepared by general counsel Mitchell Stein and signed by Sea Tow's late founder, stated there was "no proceeding involving said rights pending" before any tribunal.

At that time, Offshore Marine Towing v. Sea Tow had been pending in Florida circuit court since 1996. Stein was lead counsel in that very case.

We accuse no one of a crime — the late founder cannot answer, and questions of intent belong to sworn testimony. But the documents say what they say, and the sequence is a matter of record.

Source: USPTO declarations dated Dec. 10, 1999 (15 U.S.C. §§ 1058, 1065); Offshore Marine Towing v. Sea Tow, Fla. Cir. Ct. Case No. 96-11414(13) (pending since 1996). See Hornswaggled, "The Stein File."

Plank № 2

Refusing to participate in discovery before the Trademark Board — and losing your signature yellow trademark as a sanction . . . That hurts the brand.

The TTAB didn't cancel Sea Tow's yellow-hull registration on the merits. It cancelled it as a punishment, after four escalating sanctions orders spanning 2015–2017, findings that Sea Tow's responses were "evasive and nonresponsive," and a "consistent lack of cooperation in discovery." The Board's conclusion:

"Any sanction short of judgment would be futile and unfair."

Source: TTAB, Smith Mountain Lake v. Sea Tow, Cancellation No. 92059856 (Sept. 29, 2017), cancelling Registration No. 3678375 (the color yellow applied to boat vessels).

Plank № 3

Not telling your franchisees you lost that mark . . . That hurts the brand.

The yellow hull was marketed to you as a core, federally protected brand asset. The registration was cancelled in September 2017. Yet Sea Tow's membership agreement has continued to list "the color yellow" among its "Proprietary Properties." So we ask — as questions, not findings: Was there a memo? A bulletin? Anything? The Jaegers' attorneys brought the cancellation to the federal court's attention in December 2021. Did Sea Tow ever bring it to yours?

Source: TTAB Cancellation No. 92059856; Jaegers' Exhibit B, USPTO Order and Cancellation of Registration, E.D.N.Y. DE 177 (filed Dec. 13, 2021).

Plank № 4

Keeping an attorney with multiple federal sanctions as your general counsel . . . That hurts the brand.

Mitchell Stein has been sanctioned in three separate federal matters — Alkoff v. Gold (1988), Margo v. Weiss (2000), and Libaire v. Kaplan (2008) — totaling $94,854, with one federal magistrate writing that Stein had "flouted his professional obligations" and had not "learned his lesson." That's the man steering your Frochise™'s legal strategy for nearly four decades.

Source: Alkoff v. Gold (1988); Margo v. Weiss (2000); Libaire v. Kaplan (2008) — $94,854 in sanctions across three federal courts. See Hornswaggled, "The Stein File."

Plank № 5

Not registering with the State of New York, as required by law . . . That hurts the brand.

In April 1988, the New York Attorney General wrote to Sea Tow's founder: "Our records show no registration of a Sea Tow prospectus." By December 1989, Sea Tow signed an Assurance of Discontinuance — neither admitting nor denying that it "is a franchisor" that sold franchises "unlawfully" — and paid $1,000. And then? As far as we know, in the decades since, Sea Tow has never registered under the New York Franchise Sales Act. In 2022, a federal judge examined the payment structure anyway:

"The Management Agreement's payment structure fits comfortably within" the definition of a franchise fee. — Judge Joanna Seybert, Sept. 30, 2022

Source: NY AG letter, Apr. 18, 1988 (E.D.N.Y. Doc. 192-2); Assurance of Discontinuance, Dec. 1989 (Doc. 192-3); Judge Seybert, Memorandum & Order, ECF No. 216 (Sept. 30, 2022); NY Gen. Bus. Law Art. 33, §§ 680–695.

Plank № 6

Not being transparent about fees and fines . . . That hurts the brand.

A registered franchise discloses every fee upfront — FDD Items 6, 7, and 8, in writing, before you sign. A Frochise™ delivers surprises. The court record establishes a 15%-of-gross-revenue structure; the litigation record and franchisee accounts describe fees and fines that were never laid out in any disclosure document — because, as far as we know, no NYFSA-registered disclosure document exists. If we're wrong, we invite Sea Tow to publish its registration number. We'll print it in gold.

Source: Magistrate Judge Locke, E.D.N.Y. Doc. 262 (Mar. 19, 2024) (15% of gross revenue); Judge Seybert, ECF No. 216.

Plank № 7

Losing your standing with the SBA . . . That hurts the brand — and hurts you.

Every franchisor on the SBA Franchise Directory had until June 30, 2026 to execute the new Franchisor/Distributor Certification or be removed — and removal means franchisees lose SBA loan eligibility, which means buyers can't finance the purchase of your business. That deadline has now passed. As far as we know, Sea Tow's recertification remains unverified — and consider the bind: certifying would mean affirming compliant franchise operations, while Sea Tow spends its days in federal court insisting it isn't a franchise at all. The Frochise™ paradox, notarized.

Source: SBA Information Notice 5000-866746 (eff. Apr. 21, 2025), recertification deadline extended to June 30, 2026. Sea Tow's post-deadline Directory status: unverified as of publication. Framed as an open question.

Plank № 8

Taking a franchise and then suing the family you took it from . . . That hurts the brand.

The Jaegers ran Sea Tow Tampa Bay. Their franchise was terminated, the operations were gone — and then, on June 29, 2020, Sea Tow sued them in federal court in New York, 1,100 miles from their home. Meanwhile, in the parallel Tampa Bay Marine file, the record shows the terminated franchisee's member funds withheld, the business transferred, and a demand for a new $725,000 franchise fee from the replacement operator. The company that "doesn't collect franchise fees" allegedly wanted three-quarters of a million dollars for the privilege.

Source: E.D.N.Y. Case No. 2:20-cv-02877 (filed June 29, 2020); TBM adversary complaint, First Am. Compl., Doc. 19, ¶ 38 (Nov. 11, 2020) ($725,000 demand).

Plank № 9

Obstructing and delaying to keep a lawsuit going for over six years . . . That hurts the brand.

Don't take our word for it. Take the judges':

March 2023: Judge Nina Morrison found Sea Tow appeared to be seeking amendment "simply to slow down the litigation and drain the Jaeger Defendants of their comparatively limited resources." (DE 238 at 7–8.)
December 29, 2025: Magistrate Judge Locke found a Sea Tow representation in its motion papers was, in the court's word, "untrue."
February 2026: After Locke capped depositions at 10 per side, Sea Tow served 17 non-party subpoenas seeking 23 depositions. The court froze the entire campaign — and warned the next dispute could bring a special master at the parties' expense.

Filed June 29, 2020. It is now July 2026. Six full years. Who benefits from year seven?

Source: E.D.N.Y. DE 238 (Mar. 2023); Order of Dec. 29, 2025 (Locke, M.J.); Scheduling Order Feb. 2, 2026; subpoena freeze Feb. 2026.

Plank № 10

Taking over that territory for the family's own benefit . . . That hurts the brand.

Who operates Sea Tow Tampa Bay today? Per Sea Tow's own 2025 state-court filing, the plaintiff lineup includes H2FRO, Inc. — a Florida corporation owned and controlled by Joseph and Kristen Frohnhoefer — "operating Sea Tow Tampa Bay." The territory stripped from the Jaeger family now sits, per the public corporate record, in a Frohnhoefer family entity. Whether that was the plan all along is a question for sworn testimony. But the paperwork is not hiding.

Source: Suffolk County Sup. Ct., Index No. 606928/2025 (plaintiff lineup incl. H2FRO, Inc.); Fla. Div. of Corps. Doc. P22000014445 (H2FRO, Inc., filed Feb. 2022, Joseph J. Frohnhoefer III and Kristen J. Frohnhoefer, officers).

WHAT THE INSPECTOR ALSO FOUND IN THE ATTIC

You asked what you missed, Fleet. The inspector's flashlight kept moving:

Plank № 11

Losing your trademarks in an entire country . . . That hurts the brand.

In January 2025, the Canadian Federal Court struck Sea Tow's SEA TOW and SEA TOW & DESIGN marks from the Canadian Register, finding C-Tow's use predated Sea Tow's — and that Sea Tow had known of C-Tow's prior use since December 1992. Sea Tow was ordered to pay over $412,000 in C-Tow's legal fees.

Source: Sea Tow v. C-Tow, 2025 FC 27 (Can. Fed. Ct., Jan. 6, 2025).

Plank № 12

Your own co-counsel quitting mid-case . . . That hurts the brand.

In August 2023, Sea Tow's own co-counsel withdrew, with the record reflecting concerns about legal strategies described as "contrary to the law." When your own hired lawyers row for shore, that's not the newsletter's doing.

Source: E.D.N.Y. Doc. 241 (Aug. 2023) (withdrawal of Steven Altman).

Plank № 13

Getting caught forum-shopping in state court . . . That hurts the brand.

When the federal court shut the discovery door, Sea Tow filed in Suffolk County. Justice John J. Andrews stayed the case, explicitly finding Sea Tow appeared "to be attempting to use this action to obtain further discovery to be used in the federal action" — creating a second court record flagging the franchise registration problem.

Source: Suffolk County Sup. Ct., Short Form Order, NYSCEF Doc. 55, Index No. 606928/2025 (Jan. 12, 2026); see also E.D.N.Y. DE 311-4 at 7.

Plank № 14

Hiding your own deposition testimony under blanket confidentiality . . . That hurts the brand.

Per the July 7, 2026 joint discovery status report, Sea Tow has designated its own principals' deposition transcripts confidential — wholesale. If the sworn testimony of your franchisor's leadership would reassure you, why can't you read it? Termites, remember, thrive when they are neither seen nor talked about.

Source: E.D.N.Y. Doc. 318, Joint Discovery Status Report (July 7, 2026); depositions of Stein, Frohnhoefer III, and K. Frohnhoefer concluded by the Apr. 23, 2026 deadline.

Plank № 15

Your general counsel offering to represent both sides of a deal . . . That hurts the brand.

The record contains this, attributed to the man in question: "get rid of your attorney, and I will handle this for both of you." In the Tampa Bay file, that pattern ended with a franchisee in bankruptcy and a nine-count adversary complaint naming Stein personally — malpractice, fraudulent misrepresentation, breach of fiduciary duty, and more. The counts were allegations, dismissed with the bankruptcy; the pattern is the question.

Source: E.D.N.Y. Doc. 302-7 at 52; TBM adversary proceeding, First Am. Compl., Doc. 19 (Nov. 11, 2020) (nine counts; dismissed without prejudice with underlying bankruptcy).

Plank № 16

Filing paperwork that seizes a friend's company . . . That hurts the brand.

Dr. Russ L'HommeDieu incorporated Cross Bay Marine, Inc. with his own funds and, per his sworn Statement of Fact on file with the Florida Division of Corporations, was its sole officer, sole director, and sole shareholder from the date of formation. On March 1, 2022, the deal to take over the Tampa Bay territory collapsed. Twenty days later — March 21, 2022 — an Annual Report was filed for Cross Bay Marine that removed him from his own corporation entirely and listed Joseph J. Frohnhoefer III as "President" and "CEO" and Kristen Frohnhoefer as "Vice President" — positions he swears under oath they never held and were never authorized to hold.

Two days after that, per the federal court record, two Twin Vee vessels moved out of Cross Bay Marine to Sea Tow Services International and then to H2FRO, Inc. — the Frohnhoefer family entity — all on the same day. A RAM 2500 truck titled to Cross Bay Marine was subsequently transported to New York.

Florida Statutes § 817.155 makes filing false information with the Division of Corporations a third-degree felony. The Florida Department of State acknowledged the statute while explaining it "acts in an administrative filing capacity only" with no investigative authority. We accuse no one of a crime — whether these filings were false, and who authorized what, are questions for sworn testimony and courts of competent jurisdiction. But the filings themselves, and the sworn Statement of Fact contradicting them, sit side by side in the state's own public database. Any franchisee can read both in five minutes. And every franchisee should ask: if corporate control of a Frochise™ neighbor's company can change hands with one online filing, what protects yours?

Source: Fla. Div. of Corps. filing history, Cross Bay Marine, Inc. (Annual Report filed Mar. 21, 2022; sworn Statement of Fact, June 2022); M.D. Fla. Doc. 12 (mc-00008) at 4–5; Fla. Stat. § 817.155. See sunbiztheft.com.

GO INTO THE ATTIC YOURSELF

Don't believe the inspector? Good. You shouldn't take anyone's word for what's crawling in your investment — not ours, not Sea Tow's. Bring your own flashlight:

PACER (pacer.uscourts.gov) — E.D.N.Y. Case No. 2:20-cv-02877. Read DE 192 (the 1988–89 AG file), ECF 216 (the Seybert ruling), DE 238, the Dec. 29, 2025 order, Doc. 318. Ten cents a page.
TTABVUE (ttabvue.uspto.gov) — Cancellation No. 92059856. Read the sanctions orders yourself.
NYSCEF — Suffolk County Index No. 606928/2025, Doc. 55.
Florida Division of Corporations (sunbiz.org) — look up H2FRO, Inc. and KJF, LLC. And while you're there, pull the filing history for Cross Bay Marine, Inc. and read the sworn Statement of Fact on file (see Plank № 16). The Annual Report and the sworn statement contradicting it sit side by side in the state's own database, free of charge. That's not a rumor in the attic. That's a load-bearing beam with a hole in it.
NY Attorney General FOIL request — "In the Matter of Sea Tow Services International, Inc.," Bureau of Investor Protection and Securities, 1988–89.
SBA — email franchise@sba.gov and ask, in writing, whether Sea Tow holds a current Franchisor/Distributor Certification. Then ask Sea Tow the same. Compare answers.

Every fact in this dispatch is checkable in an afternoon. That's the difference between an inspection report and a rumor.

THE POINT

A social media post is not hurting the brand. A newsletter is not hurting the brand. Abby Jaeger describing her own family's public litigation is not hurting the brand.

The termites are hurting the brand. The report just tells you where they're chewing.

And here's the part the "stop talking about it" crowd never grapples with: the people writing the reports are the ones who want the house saved. The inspector doesn't profit from the collapse. The exterminator doesn't profit from the collapse. The only parties served by silence are the termites — and whoever plans to buy the lot cheap after the roof caves in.

So here is our call to action, same as it ever was. Joe Frohnhoefer. Mitchell Stein. You can end this any day you choose: settle with the Jaegers, register under the New York Franchise Sales Act as the law has required since January 1, 1981, hand every operator a real FDD, and convert this Frochise™ into the franchise you've spent six years telling a federal judge it isn't — or spent forty years telling franchisees it is, depending on the audience. And Fleet: don't ask Abby Jaeger to stop posting. Ask Southold to start answering. Demand the registration. Demand the fee disclosures. Demand the deposition transcripts your dues paid to conceal. It's your attic. It's your investment. Shine the light.

First Amendment Satire

Hornswaggled is satire, commentary, and opinion protected by the First Amendment, based on analysis of publicly available court records, regulatory filings, and Sea Tow's own published materials. Allegations described herein are framed as open questions for sworn testimony, not as findings. Courts of competent jurisdiction will make final determinations on all disputed matters.

No Accusations of Perjury or Crime

This dispatch does not accuse any individual of perjury or any crime. It reports the contents and sequence of public documents and asks questions about them. All parties named retain their full legal rights and are invited to respond; corrections supported by the record will be published.

AI-Generated Content Disclosure

This dispatch was generated with the assistance of Claude (Anthropic), an AI language model, based on court documents and public records supplied to it. Readers should independently verify all claims against original filings.

Not Legal Advice

Nothing herein is legal advice. Consult a licensed attorney regarding your specific situation.

Public Records Sourcing

Sources: PACER (E.D.N.Y. Case No. 2:20-cv-02877-WFK-SIL), NYSCEF (Suffolk County Index No. 606928/2025), TTAB records (Cancellation No. 92059856), Canadian Federal Court (2025 FC 27), Florida Division of Corporations, New York Attorney General enforcement records (Docs. 192-2 through 192-4), and SBA Information Notice 5000-866746.

Fair winds and following seas, Hornswaggled

We may or may not be a crew. We may or may not own a flashlight. We definitely know our way around an attic.

[Editorial correction, Hornswaggled web edition: the original mailing stated the Jaegers ran the Tampa Bay franchise for seventeen years and described them as a seventeen-year franchisee family. That figure was incorrect and has been removed; the Jaegers took the franchise in 2019.]