How it started

Erich and Abigail Jaeger operated Sea Tow’s Tampa Bay territory — announced at an annual meeting, per our reporting, as “the new owners of Tampa Bay.” They were a working family: renters, not owners, with two young boys, their savings and future bound up entirely in boats, gear, and reputation. In 2019, Sea Tow took the franchise back. Then, with the family already stripped of its income, Sea Tow filed suit on June 29, 2020 — not in Tampa, but in the Eastern District of New York, 1,100 miles away, where the Frohnhoefers live and general counsel Mitchell Stein practices — demanding $1.5 million for alleged breach of a management agreement and trademark infringement.

Pause on the arithmetic of that demand. By all accounts, a family renting its home had no conceivable ability to pay $1.5 million, and no obvious means to fund a New York legal defense. Which raises the question this newsletter has asked from its first issue: was the lawsuit filed to be won on the merits — or filed because, against a defendant who cannot afford to answer, filing is winning? The Jaegers, as it happens, found counsel with a very big heart — Rosen Karol, reported to be on contingency — and the calculation, if that is what it was, failed.

The counterattack that reframed everything

The Jaegers answered with counterclaims and third-party claims naming Stein and Joseph Frohnhoefer III personally, alleging among other things violations of the New York Franchise Sales Act (GBL Art. 33) — the same statute the NY Attorney General invoked against Sea Tow’s founder in 1988. Their theory: whatever Sea Tow calls its arrangement, the law looks at substance, and the substance — fees, brand control, marketing plan — is a franchise that was never registered and never disclosed. On September 30, 2022, Judge Joanna Seybert gave that theory its first major fuel, ruling that the fee structure the Jaegers alleged “fits comfortably within” the statutory definition of a franchise fee ECF No. 216. (Credit where due: that ruling is Judge Seybert’s; the case now sits with Judge William F. Kuntz II, with Magistrate Judge Steven I. Locke managing discovery.)

Six years later: what survives

Sea Tow’s affirmative case has been narrowed to two claims: a contract dispute over management fees for May and June 2020 — sixty days — and a Lanham Act claim about the timing of de-branding a boat. A paint job. The Jaegers’ counterclaims largely remain, and their renewed bid for summary judgment on liability is before Judge Kuntz following the July 7, 2026 joint discovery status report Doc. 318 — which also catalogued Sea Tow’s blanket confidentiality designation over its own principals’ deposition transcripts, disputed late errata sheets, documents Sea Tow says don’t exist, and a franchise-unit valuation methodology frozen, as far as the record shows, to a four-year-old spreadsheet.

The conduct file

Along the way, the court record accumulated findings that no satirist could improve upon. In March 2023, Judge Nina Morrison denied Sea Tow leave to amend, finding it appeared to be seeking amendment “simply to slow down the litigation and drain the Jaeger Defendants of their comparatively limited resources” DE 238. In August 2023, Sea Tow’s own co-counsel Steven Altman withdrew, telling the court STSI “insisted on legal strategies that I believe are contrary to the law and my ethical obligations” Doc. 241. In December 2025, Magistrate Judge Locke found a representation in Sea Tow’s motion papers to be, in the court’s word, “untrue,” called its requests “overbroad, unduly burdensome and wholly disproportionate,” and closed document discovery. In February 2026, Sea Tow served seventeen non-party subpoenas against a ten-deposition court order — and the court stayed the entire campaign on an emergency motion Doc. 311 before letting it proceed under court-imposed confidentiality DE 314. Sea Tow then opened three miscellaneous dockets in the Middle District of Florida to compel the witnesses anyway — and in doing so, handed the L’Hommedieu family a public forum to tell, under oath, a story Sea Tow surely preferred untold.

The two fronts beyond the federal case

State court. In 2025, Sea Tow — joined by family entity H2FRO, Inc. and two franchisees — sued in Suffolk County Supreme Court Index No. 606928/2025, asserting claims that look strikingly like ones dismissed federally. On January 12, 2026, Justice John J. Andrews stayed the action, finding Sea Tow appeared “to be attempting to use this action to obtain further discovery to be used in the federal action” — and, for good measure, found a “plausible” franchise relationship with rescission and damages under the GBL on the table NYSCEF Doc. 55. After a federal judge said no, walking down the street to ask a state judge is not creative lawyering; it is forum shopping, and the state judge noticed.

The SBA. The June 30, 2026 Franchise Directory recertification deadline created what we’ve called the impossible bind: certify a compliant franchise operation to a federal agency (contradicting six years of litigation posture), or fall off the Directory and cost every franchisee SBA loan eligibility. The deadline has passed; Sea Tow’s current status remains, as far as we know, unverified. Full analysis →

The question isn’t whether the ship hits the rocks. The lighthouse has been showing the rocks since 1988. The question is how many passengers go down with it.Hornswaggled — The Ghost in the Rigging

The ship’s glossary

Frochise™

Our house coinage: a franchise what acts more like a noose than a partnership. All the fees and control of a franchise; none of the registration, disclosure, or exit rights.

NYFSA

The New York Franchise Sales Act, GBL §§ 680–695. Requires registration and a disclosure prospectus before offering or selling franchises in or from New York. In force since January 1, 1981.

Assurance of Discontinuance (AoD)

A formal enforcement settlement with the NY Attorney General. Sea Tow’s founder signed one in December 1989 over unregistered franchise sales.

FDD

Franchise Disclosure Document — the audited, itemized disclosure honest franchisors provide. Ask a Sea Tow captain to show you theirs.

SBA Franchise Directory

The federal listing that gates SBA-guaranteed franchise lending. Recertification deadline for legacy brands: June 30, 2026 — now passed.

TTAB

The Trademark Trial and Appeal Board, which cancelled Sea Tow’s yellow-hull registration in 2017 as a discovery sanction.