Lawsuit by Franchisee Association Against Edible Proceeds

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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 recently 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.

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.

According to the attorney representing the Association, the decision also potentially benefits franchisee associations in other systems throughout the United States.

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