A Pennsylvania federal judge ruled this month that former Florida AAMCO franchisees did not violate their non-compete agreement when they left the franchising chain after 21 years. U.S. District Judge Anita B. Brody stated in her opinion, “Even though AAMCO has established that it has a legitimate business interest that can be protected by a non-compete, the non-compete provision must be reasonably limited in…duration and geographic extent…to be enforceable.” S
While Brody recognized AAMCO’s interests in protecting its system of franchising, she said the interests are limited in this case. “Unlike other cases, in which AAMCO has sought to enforce its non-compete agreements against rogue franchisees who infringe on AAMCO’s trademarks or operate a competing business in the same location of the former franchise, in this case there is no allegation or evidence that the Romanos . . . compete with their former AAMCO franchise or infringe upon AAMCO’s protected marks.” Judge Brody said the non-compete agreement was “unduly burdensome and overly broad” and “not reasonably tailored to protect AAMCO’s interest in the franchise itself.”
A copy of the Court’s opinion can be found here. Rob Boulter has successfully set aside non-competition provisions for franchisees. If you are a franchisee concerned about a non-competition provision, please contact Rob at [email protected].