Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION NEWS—E.D. Va.: Auto service center franchisee charged with breach of contract, promissory notes, (Sep 7, 2016)
Law Firms Mentioned:Gray, Plant, Mooty, Mooty & Bennett, P.A.
Organizations Mentioned:CEG, Inc. | Gray, Plant, Mooty, Mooty & Bennett, PA | Precision Franchising LLC
A Precision Tune Auto Care franchisee and its guarantors failed to pay operating fees, marketing fees, and note payments due under the franchise agreement, renewal agreement, and certain promissory notes, according to a complaint filed in the federal district court in Alexandria, Virginia (Precision Franchising LLC v. Ceg, Inc., September 1, 2016).
According to the complaint, Precision Franchising LLC (PFL) is engaged in the business of franchising independent business persons to operate Precision Tuning Auto Care (PTAC) service centers. In December 2003, Ceg. Inc. began operating a PTAC service center pursuant to a ten-year term franchise agreement with PFL. The franchise agreement provided that Ceg pay operating fees, marketing fees, and all costs and expenses in connection with PFL’s enforcement of the agreement. Clarence and Shylynn Goodman each individually guaranteed Ceg’s obligations under the contract.
Prior to the expiration of the franchise agreement, all of the named defendants signed a renewal agreement which provided that the franchise agreement would continue under the same terms and conditions for an additional five-year term. All of the named defendants signed the renewal agreement, along with a promissory note with PFL. Ceg and Clarence Goodman also executed a second promissory note with PFL.
Ceg later fell behind on its payments under the agreements and on the two notes and received a notice of default from PFL. When CEG failed to cure, PFL issued a second notice of default. Both notices advised Ceg that a failure to cure could result in the acceleration of the promissory notes.
PFL’s complaint asserts a claim for breach of the franchise agreement, the renewal agreement, and the two notes. The action seeks: (1) a judgment for damages; (2) prejudgment interest; (3) costs and attorneys’ fees; and (4) any other relief the court may deem just and proper.
The case is No: 1:16-cv-01118-LMB-IDD.
Attorneys: Eric L. Yaffe, Julia C. Colarusso, and Whitney A. Fore (Gray, Plant, Mooty, Mooty & Bennett, P.A.) for Precision Franchising LLC
Companies: CEG, Inc.; Precision Franchising LLC
News: FranchisingDistribution VirginiaNews