{"id":643,"date":"2013-02-26T15:48:16","date_gmt":"2013-02-26T15:48:16","guid":{"rendered":"https:\/\/www.bfvlaw.com\/northern-district-of-georgia-judge-allows-franchisors-complaint-against-franchisees-to-proceed\/"},"modified":"2013-02-26T15:48:16","modified_gmt":"2013-02-26T15:48:16","slug":"northern-district-of-georgia-judge-allows-franchisors-complaint-against-franchisees-to-proceed","status":"publish","type":"post","link":"https:\/\/www.bfvlaw.com\/northern-district-of-georgia-judge-allows-franchisors-complaint-against-franchisees-to-proceed\/","title":{"rendered":"Northern District of Georgia Judge Allows Franchisor\u2019s Complaint Against Franchisees to Proceed"},"content":{"rendered":"<p><em>Astral Health &amp; Beauty, Inc. v. Aloette of Mid-Mississippi, Inc.<\/em>, Civil Action No: 1:12-CV-1904-WBH, 2012 WL 4714890 (N.D. Ga. Oct. 1, 2012), involves a somewhat unusual set of facts.<\/p>\n<p>The plaintiff was a franchisor which supplies skin care and beauty products to its franchisees who sell the products.\u00a0 The plaintiff had franchise agreements with two of the defendants.\u00a0 Both of the franchise agreements had covenants not to compete.\u00a0 Both of the franchise agreements had expired prior to the events at issue in the lawsuit.\u00a0 Despite the fact that the agreements had expired, the parties continued to do business together, allegedly as if they were operating under the expired franchise agreements.<\/p>\n<p>After the parties\u2019 relations soured, the plaintiff filed suit, asserting that the defendants breached the terms of the franchise agreements, including by competing with the plaintiff in breach of the non-compete and by using the plaintiff\u2019s confidential information.\u00a0 The defendants moved for judgment on the pleadings.\u00a0 In ruling on the defendants\u2019 motion, the Court found that at the pleadings stage it was possible based on the plaintiff\u2019s allegations that \u201cthe parties\u2019 actions could create an implied contract under which \u2018their rights and obligations should continue to be measured as provided in the old contract.\u2019\u201d <em>Id.<\/em> (<em>quoting<\/em> <em>Town of Webster v. Village of Webster<\/em>, 280 A.D.2d 931, 934 (N.Y. S. Ct. 2001).<\/p>\n<p>The Court thus found it would be premature to dismiss the plaintiff\u2019s claim at the pleadings stage: \u201cWhile this Court recognizes that its role does not include rescuing Plaintiff from its failure to renew its franchise agreements, it would appear to be equally offensive to permit Defendants to continue to reap the benefits of a franchise agreement after its expiration and be relieved of the burdens of the same agreement.\u00a0 Only with a fully developed factual record can this Court determine which of these paths is appropriate.\u00a0 In summary, this Court concludes that the pleadings alone do not resolve the question of whether a contract existed and what the terms of that contract would be.\u201d<\/p>\n<p>Judge Hunt\u2019s reasoning appears sound given the facts alleged.\u00a0 That said, it is unclear whether his reasoning would apply in other contexts, particularly the employer-employee context.\u00a0 Nevertheless, employers who have employees under term agreements containing restrictive covenants should be sure that their agreements state that the restrictive covenant obligations survive the expiration of the agreement.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Astral Health &amp; Beauty, Inc. v. Aloette of Mid-Mississippi, Inc., Civil Action No: 1:12-CV-1904-WBH, 2012 WL 4714890 (N.D. Ga. Oct. 1, 2012), involves a somewhat unusual set of facts. The plaintiff was a franchisor which supplies skin care and beauty products to its franchisees who sell the products.\u00a0 The plaintiff had franchise agreements with two [&hellip;]<\/p>\n","protected":false},"author":18,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_mo_disable_npp":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[4,9],"tags":[25,16,22],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Northern District of Georgia Judge Allows Franchisor\u2019s Complaint Against Franchisees to Proceed - Berman Fink Van Horn P.C.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.bfvlaw.com\/northern-district-of-georgia-judge-allows-franchisors-complaint-against-franchisees-to-proceed\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Northern District of Georgia Judge Allows Franchisor\u2019s Complaint Against Franchisees to Proceed - Berman Fink Van Horn P.C.\" \/>\n<meta property=\"og:description\" content=\"Astral Health &amp; Beauty, Inc. v. 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