Atlanta Bread successfully resolves dispute with former franchisee following Georgia Supreme Court decision

Client(s) Atlanta Bread Company International, Inc.

Jones Day represented Atlanta Bread Company International, Inc. against a claim of wrongful termination by a former franchisee who sought $20 million in damages. Prior to Jones Day's involvement in the case, the trial court ruled that a non-competition provision in the franchise agreement relied upon by Atlanta Bread to terminate the agreements was unenforceable, and the Georgia Court of Appeals had affirmed. David Monde led Jones Day's successful effort to petition the Georgia Supreme Court for a writ of certiorari, arguing that the proper standard to assess the enforceability of an in-term restrictive covenant in a franchise agreement was an issue of first impression under Georgia law, and should be assessed differently than post-termination covenants. Mr. Monde argued in the Georgia Supreme Court and the International Franchising Association supported Atlanta Bread's position in the Georgia Supreme Court. Although that Court ruled on June 29, 2009 that the in-term covenant was unenforceable, it remanded the case back to the trial court for a determination on the other grounds asserted by the company for termination. Trial is anticipated in the last quarter of 2009.

Lupton-Smith, et al. v. Atlanta Bread Co. Int'l, Inc., 285 Ga. 587, 679 S.E.2d 722 (Ga. 2009); 292 Ga. App. 14, 663 S.E.2d 743 (Ga. App. 2008); Superior Court of Cobb County, Georgia, No. 06-1-1404