Dylan enters into a franchise agreement with The Massage Garage (“TMG”) , a national massage chain located primarily in shopping malls and airports. Dylan’s franchise is located in the Syracuse New York Airport. His agreement with TMG provides that TMG will not license another franchisee at a location closer than 12 miles from Dylan’s location. The agreement also identifies Dylan’s location as “Syracuse, New York Airport.”
Eighteen months later, Dylan is doing well with his business, but learns that TMG is planning on licensing a franchise to Warren in the Carousel Mall in Syracuse. The mall is 13 miles by car from Dylan’s storefront, but only 11.5 miles from the Eastern most edge of the Syracuse Airport.
Dylan writes to TMG, protesting and stating that this is a violation of his franchise agreement. He states that the 12 mile rule means the shortest distance from his location, the Syracuse Airport to the other location, the Carousel Mall, which is 11.5 miles. TMG responds by sending him a copy of a brochure they send to all potential franchisees prior to contracting which states that “You have location protection. We will not open another Massage Garage location closer than 12 miles from your storefront.”
Dylan also has an email he got from TMG just before they signed the agreement. The email promises that if Dylan takes a TMG franchise, and is still in business a year later, that TMG will give him a right of first refusal on any new TMG franchise opportunities within 15 miles of your franchise. TMG never contacted Dylan before granting the new franchise to Warren.
Dylan files suit to enjoin TMG from granting Warren the new franchise and to get a declaratory judgment that he has a 15 mile right of first refusal on future franchises.
Discuss both side’s arguments
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