Lord of the Fries is also a weird card game which has been a fixture on (at least two) college campuses since before LOTR even started filming, so I think it's more a joke on the phrase "Lord of the Flies" than anything. As for merchandising in general, I can't really get too upset about it. I don't buy it, but if some people want to buy it and other people are willing to sell it, it's no skin off my nose.
DaughterofVana, I might be wrong about this but I think Tolkien actually sold the movie rights in the late sixties (there were a few interesting letters from him regarding one script he had seen which apparently changed EVERYTHING and made the Eagles come to the rescue approximately every twenty minutes). I'm not sure what the status of the rights have been since then, but I get the feeling that they were being sold from studio to studio, so to speak, and that the Tolkien family had no say over it. Certainly it's hard to imagine Christopher Tolkien ever letting ANYONE take a crack at filming the books while he was alive. And while I wasn't around in the late sixties, I doubt that movies were merchandised in the same way or that it was even really a concept ("2001: The Happy Meal"). So the Tolkien family wouldn't have had anything to do with that part of it, though it's easy to imagine them being annoyed.
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Father, dear Father, if you see fit, We'll send my love to college for one year yet
Tie blue ribbons all about his head, To let the ladies know that he's married.
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