Lawsuit By Franchisee Association Against Edible Arrangements To Proceed, As Federal Judge Denies Chain's Motion To Dismiss

BRIDGEPORT, Conn., July 20, 2011 /PRNewswire/ -- A lawsuit against the Edible Arrangements franchise system will proceed in the United States District Court for the District of Connecticut, according to an Order issued yesterday denying the company's bid to have the franchisee association's case dismissed.  In the opinion, the Hon. Warren W. Eginton ruled that the EA Independent Franchisee Association, an organization representing almost 200 franchisees of the Connecticut-based company, could proceed on all of its claims in court.  According to the attorney representing the Association, the decision also potentially benefits franchisee associations in other systems throughout the United States.

Filed in September 2010, the lawsuit (Case # 3:10-cv-01489-WWE) alleges that Edible Arrangements has altered the business arrangement with its franchisees over the last several years to the detriment of the Association's members and all other franchisees in the chain's system, in violation of its contractual obligations and general principles of fairness.  In addition, the complaint charges that the company has unfairly implemented several system-wide mandates, has enforced new mandates on a discriminatory basis and has failed to disclose necessary and required business information to its franchisees in violation of franchise disclosure rules and regulations.  

Edible Arrangements asked the court to dismiss the franchisees' complaint on the grounds that the Association did not have standing to bring claims on behalf of its franchisee members.  The company also argued that its franchise agreement required the franchisees to arbitrate any disputes before the American Arbitration Association as a basis for the Court to dismiss the complaint.  In a succinct opinion, Judge Eginton determined that Edible Arrangements' legal arguments were without merit, and denied the motion to dismiss.  

"We are extremely pleased with the Court's determination," said Justin M. Klein, a franchise attorney at Red Bank, N.J.-based Marks & Klein, LLP, which represents the Association.  "This decision benefits not only the Edible Arrangements franchisees, but franchisees throughout the United States.  It means that individual franchisees may rely on associations they join to help protect their interests against overbearing conduct of a franchisor.  Now that the Court has given the EA Independent Franchisee Association the opportunity to fight this fight, we will vigorously pursue the claims to ensure that the franchisees system-wide can have a fair chance at success."

"We believe the Court got it right on all points," said Sherri Vertorano, a North Carolina-based franchisee and EA Independent Franchisee Association Member.  "We have been forced to protect our business investments as a result of unfortunate decisions made by the company that, quite frankly, work severely against the franchisees.  Now that the Court has allowed us to proceed, we look forward to a swift resolution of our claims so we can focus on offering the best product, great customer service and a memorable customer experience," Vertorano added.  

About Marks & Klein

Marks & Klein, LLP is a New Jersey-based law firm, with offices in New York and Chicago, that focuses its practice in the area of franchise and business law.  The firm and its lawyers have been counsel in many prominent franchise disputes throughout the United States. For more information, contact Justin M. Klein, (732) 747-7100 or email [email protected].

SOURCE Marks & Klein, LLP