The U.S. District Court for the Southern District of Ohio had no trouble preliminarily enjoining a franchisee and its principals (“Pivotal”) from violating a one-year covenant against competition, when Pivotal’s principals formed a competing company, hired Pivotal’s employees for the same roles in the new business, sent notices to industry contacts that Pivotal was “rebranding,” and declared the franchise agreement terminated. Relo Franchise Servs., Inc. v. Gilman, 2019 WL 324215 (S.D. Ohio Jan. 25, 2019). Pivotal attempted to avoid the injunction by arguing that its franchise agreement with Relo was unenforceable under the Ohio Business Opportunity Act and common law because Relo had fraudulently induced Pivotal to enter into the agreement with improper financial performance representations. However, the court found that any financial performance representations were made only after Pivotal had executed the franchise agreement and thus could not have induced Pivotal to enter into the relationship.
- Partner
Maisa Frank represents clients in a variety of litigation matters. Whether conducting pre-dispute investigations, navigating litigation, or negotiating resolutions, Maisa’s advice and strategy is vital to clients facing ...
The information contained in this post is provided to alert you to legal developments and should not be considered legal advice. It is not intended to and does not create an attorney-client relationship. Specific questions about how this information affects your particular situation should be addressed to one of the individuals listed. No representations or warranties are made with respect to this information, including, without limitation, as to its completeness, timeliness, or accuracy, and Lathrop GPM shall not be liable for any decision made in connection with the information. The choice of a lawyer is an important decision and should not be based solely on advertisements.
About this Publication
The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP.
To subscribe to monthly emails for The Franchise Memorandum, please click here.