Peterbrooke Franchising of Am., LLC v. Miami Chocolates, LLC

312 F. Supp. 3d 1325
CourtDistrict Court, S.D. Florida
DecidedFebruary 28, 2018
DocketCase No. 16–20417–Civ–COOKE/TORRES
StatusPublished
Cited by7 cases

This text of 312 F. Supp. 3d 1325 (Peterbrooke Franchising of Am., LLC v. Miami Chocolates, LLC) is published on Counsel Stack Legal Research, covering District Court, S.D. Florida primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Peterbrooke Franchising of Am., LLC v. Miami Chocolates, LLC, 312 F. Supp. 3d 1325 (S.D. Fla. 2018).

Opinion

(Id. at 14-15, § 4.6.3).

Section 4.6.4 continues:

*1330You agree, at Your expense, to keep Your cash register system in good maintenance and repair. Following Our testing and determination that it will prove beneficial to You, You agree to install at Your own expense such additions, changes, modifications, substitutions and/or replacements to Your hardware, software, telephone lines, power lines and other related facilities as We direct on those dates and within those times specified by Us in Our sole and exclusive discretion in Our Operating Manual or otherwise.

(Id. at 15, § 4.6.4).

Section 18 specifies that failure to comply with any provision is a default:

If you or any of Your Owners fail to comply with any provision of this Agreement or any mandatory specification, standard, or operating procedure prescribed by Us, We may terminate this Agreement effective immediately upon delivery of written notice of termination to You....

(Id. at 50, § 18.1.1).

Section 19 spells out the parties' post-termination rights and obligations, including Miami Chocolates' obligation to stop using Peterbrooke trademarks:

19.2.1 Upon the termination or expiration of this Agreement, You shall:
(a) not thereafter, directly or indirectly, at any time or in any manner identify Yourself or any business as a current or former Peterbrooke Chocolatier Shop or as a current or former franchisee of or as otherwise associated with Us, or use any Mark, any colorable imitation thereof or any mark substantially identical to or deceptively similar to any Mark in any manner or for any purpose, or utilize for any purpose any trade name, trademark or service mark, Domain Name, or other commercial symbol or trade dress that suggests or indicates a connection or association with Us;
(b) remove all signs containing any Mark and return to Us or destroy forms and materials containing any Mark or otherwise identifying or relating to an Peterbrooke Chocolatier Shop;
* * *
19.2.2 You shall furnish to Us (a) within thirty (30) days after the effective date of termination or expiration, evidence satisfactory to Us of Your compliance with Subparagraphs (a) and (c) of the foregoing obligations, and (b) within thirty (30) days after the later of expiration of Our option to purchase the Shop as provided in Section 19.6 or receipt of notice that We elect not to purchase the Shop pursuant to Section 19.6, evidence satisfactory to Us of Your compliance with the foregoing obligations.1

(Id. at 52-53, §§ 19.2.1-19.2.2).

Section 19 also includes a non-compete provision:

19.4.1 Upon termination of this Agreement by Us in accordance with its terms and conditions, or by You without good *1331cause ... neither You nor any of Your Principal Owners shall directly or indirectly, through a member of the immediate family of You or a Principal Owner or otherwise for a period of two (2) years commencing on the effective date of such termination or expiration or the date on which You cease to operate the Shop, whichever is later: (a) have any interest as a disclosed or beneficial owner in any Competitive Business located or operating within a twenty five (25) mile radius of the Shop or any other Peterbrooke Chocolatier Shop....2

(Id. at 53-54, § 19.4.1).

Finally, the Agreement requires Miami Chocolates to de-identify the Shop as a former Peterbrooke franchise upon termination or expiration, specifically requiring that it:

[M]ake such modifications and alterations, including removal of all distinctive physical and structural features associated with the Trade Dress of Peterbrooke Chocolatier Shops, as may be necessary to distinguish the Site of the Shop so clearly from its former appearance and from other Peterbrooke Chocolatier Shops as to prevent any possibility that the public will associate the Site with Peterbrooke Chocolatier Shops and any confusion created by such association.

(Id. at 53, § 19.2.1(g) ).

PFA purchased PFI's rights and responsibilities under the Franchise Agreement in January 2012. (ECF No. 63 ¶ 14). Under a separate agreement with Peterbrooke Idea Company, LLC, PFA also possesses the right to use Peterbrooke trademarks worldwide to operate chocolate stores and to grant franchises and licenses to third parties to do the same. (ECF No. 63 ¶ 10), and to pursue legal action against third parties, including former franchisees, for infringement and unfair competition. (Id. ).

When the McDonalds purchased Miami Chocolates, Peterbrooke stores used an Iciniti Corp POS. (ECF No. 166 ¶ 6). According to Defendants, initial discussions about transitioning away from the Iciniti Corp POS began in 2012. (Id. ¶ 7). In November 2013, PFA sent Miami Chocolates a notice requiring it to change over to a Micros Simphony System (the "Micros System"). (Id. ¶ 8). Miami Chocolates refused, asserting that the Micros System was not appropriate for a chocolatier shop and did not meet Peterbrooke specifications. (Id. ¶ 10).

On October 14, 2015, PFA sent Miami Chocolates another notice requiring it to change its POS system, this time to the NCR Silver POS System with Simplebox software (the "New POS System"). (Id. ¶ 21; ECF No. 163 ¶ 10). Miami Chocolates refused for the same reasons it refused to install the Micros System. (ECF Nos. 163 ¶ 22, 166 ¶¶ 30-31). On December 2, 2015, PFA sent Miami Chocolates a Notice of Default. (ECF No. 163 ¶ 24). Miami Chocolates responded by confirming its refusal to change over to the New POS System (Id. ¶ 25), prompting PFA to send the Notice of Termination on January 28, 2015. (ECF Nos. 20, 163 ¶ 12).

Miami Chocolates continued operating following the termination (ECF No. 163 ¶ 16-17), but Defendants claim they took *1332several steps to disassociate it from PFA and its trademarks.3 (ECF No. (ECF No. 166 ¶¶ 48-49). PFA disagrees:

It was not until PFA filed for emergency preliminary injunctive relief in this Court ... that Defendants made any effort to cease operating as a Peterbrooke shop. But even those efforts were woefully inadequate and ineffective. Defendants took half-hearted measures (e.g., sloppily spray painting over the word "Peterbrooke" on the distinctively shaped and colored outdoor Peterbrooke Chocolatier sign, placing a garbage bag over another prominent exterior sign) that actually harmed PFA, making the premium Peterbrooke Chocolatier brand look déclassé and unreliable....
Even after removing the word "Peterbrooke" from the premises, Defendants continue to still use PFA's trade dress, phone numbers, social media pages, and operate at the location in violation of the Franchise Agreement's valid non-compete provision.

(ECF No. 163 ¶¶ 18-20).

PFA filed this lawsuit on February 4, 2016. (ECF No. 1).

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312 F. Supp. 3d 1325, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peterbrooke-franchising-of-am-llc-v-miami-chocolates-llc-flsd-2018.