Zawideh successfully defends franchisee from noncompete claim by franchisor.
In its Complaint, Plaintiff, a regional pizza franchisor, alleged that the Defendants, Robert S. Zawideh’s clients, operated one of their franchise restaurants for over a year after the expiration of the franchise agreement, and thereafter, opened a new pizza business in the same location. Plaintiff claimed these actions violated the franchise agreement, which provides that Defendants may not operate a competing pizza business within five miles of the former location for five years following the termination of the franchise agreement. Defendants’ first defense to this suit was based on the premise that the five-year non-compete provision was unreasonably long and not carefully tailored to protect the franchisor’s legitimate business interests. Initially, Zawideh filed a motion with the Court to issue an order staying the case in favor of binding arbitration. Prior to the judge granting that motion, Zawideh brought to the attention of the franchisor’s attorney that it appeared his client secretly owned and operated pizza franchises of a competing pizza franchisor, and that one of these competing franchises was approximately one mile from Zawideh’s client’s location. After the court granted Zawideh’s motion compelling arbitration, and after Zawideh demanded the depositions of the franchisor’s CEO and one of its other executives, the franchisor agreed to dismiss its claims, and further agreed to reimburse Zawideh’s clients for attorney fees if it ever attempted to re-file its claims again.
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