OPINION
HOWARD, Chief Judge.
Appellees filed suit against appellant for "all damages and injuries sustained by them by reason of the fraud, embezzlement, defalcation and unlawful acts of Howard Watkins". The complaint alleged that Watkins represented himself to be appellant's franchisee and licensee and that appellant permitted Watkins to hold himself out to the public as such. The pretrial order, however, stated the issues in the following terms:
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