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If the print was something that you had been able to clean up and the audience wasn't affected, I'd say to give the home office a call and heads up. The manager and projectionist on the other end are going to be pissed no matter how you handle it, so handle it in the most professional way possible by notifying the brass and letting them take action or not.

S.O.P.: File a written report (to at least two different people) detailing the damage, and get someone else to look at the print and verify in writing that the damage was as described. C.Y.A.

Each theatre has a budget that includes things like payroll, utilities and supplies. There is often a category for "film" ... including damaged film.

Also, think about this in terms of organizational behavior:
Basically what happens when you have one slacker and one over-achiever like that is the slacker doesn't get in trouble for slacking and the over-achiever doesn't get "credit" for doing all the work. The only way the slacker will get in trouble is when things don't get done. Since the over-achiever is doing it all he is, in essence, just giving the slacker permission to be lazy.

I used to find myself in situations all the time where I ended up doing a lot of extra work because other people weren't doing their work. After a while, people will just start slacking off even more because they think that you'll do it for them. It even got so bad that when things didn't get done managers would start comming to ME even though it wasn't my job! Finally, I just said to myself, "F*** it! If other people aren't going to do their jobs then I'm not going to it for them." Once a few people started getting in trouble for being lazy they started working more.

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I say reject it, unless you have some sort of bizarre and creepy love for the company, which no chain employee could possibly have since they all get paid so pitifully.

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Since both theaters work for the same company, I might do a little detective work (do they always damage prints? Are they short-staffed? Are the defects clearly lab-related, or operator-damage? Etc.)

If it is clearly lab-related, I'd reject it. Techincolor can see it's lab related, and shouldn't charge you, even if the print has been out for a while.

If it is operator damage, what happens if you report it? Is the company known for comming down hard on people who damage prints (ie: might they fire someone?) Can you live with "bad blood" between you and the other theater?

I'd have to know exactly how bad it is damaged.

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Question: What does it say about a theatre when they post a sign "We are sorry to inform you that there is a very bad scratch through most of the print on Screen #5, and we can't get a replacement."? (Sign actually seen at a Rochester theatre during the first week's run of a major release).

Answer: It says they damaged the print, and are unwilling to admit it and pay for a replacement. So the audience is either forced to put up with the damage, or go to another theatre.