Source: https://www.goldlawgroup.com/franchise-laws/delaware/
Timestamp: 2019-04-21 06:27:02+00:00

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Delaware’s franchise relationship law governs dealer and franchise terminations and non-renewals. The law is called the Delaware Franchise Security Law (“DFSL”).
The operative provision in the DFSL is Sec. 2552, which is captioned “Unjust Termination of, or Failure to Renew, a Franchise.” This provision governs franchise terminations by declaring in subsection (a) that “Termination of a franchise by a franchisor shall be deemed to be "unjust," or to have been made "unjustly," if such termination is without good cause or in bad faith.” The subsection then states the obverse that “Any termination of a franchise which is not unjust shall be deemed to be ‘just,’ or to have been made ‘justly.’” The DFSL also proscribes renewal conduct, by declaring that “The failure of a franchisor to renew a franchise shall be deemed to be "unjust," or to have been made "unjustly," if such failure to renew is without good cause or in bad faith.” Symmetrically, the statute provides that “Any failure to renew a franchise which is not unjust shall be deemed to be ‘just,’ or to have been made ‘justly’."
Further, the DFSL provides for damages, other than the above, including, but not limited to: (1) A fractional portion of the franchised distributor's tangible assets (both real and personal) in this State used with respect to the terminated or unrenewed franchise, including, but not limited to, sales outlets and facilities, offices, warehouses, trucks and the furnishing, equipment and accessories therein; the numerator of the fraction shall consist of the franchised distributor's gross sales (in the most recently completed fiscal year) within this State attributable to the terminated or unrenewed franchise, and the denominator of the fraction shall consist of the franchised distributor's total gross sales (in the most recently completed fiscal year) in this State; and (2) Loss of goodwill; and (3) Loss of profits, which loss shall be presumed to be no less than 5 times the profit obtained by the franchised distributor, by virtue of the terminated franchise, in the most recently completed fiscal year; and (4) All other damages allowed under the law of this State; and (5) The reasonable counsel fees and expenses incurred in the action or actions brought pursuant to this chapter.
In re Kirkwood Kin Corp. v. Dunkin' Donuts, Inc., 1997 WL 529587,Del.Super. (1997) (“plaintiffs contend that Dunkin' violated 6 Del. C. § 2552(j) by charging excessive rent in light of Dunkin's interests and purposes in the property. … Dunkin' asserts that summary judgment is appropriate with respect to on this count on any of several grounds. The first ground put forth by Dunkin' is that charging unreasonable and excessive rent alone is not a violation of the Franchise Security Law. Specifically, Dunkin' argues that the “remedies” section of the statute does not provide a cause of action based on the charging of unreasonable or excessive rent: (a) If a franchisor (1) unjustly terminates a franchise, or (2) unjustly fails or refuses to renew a franchise, or (3) threatens, or attempts, or gives notice that it intends to attempt unjustly to terminate a franchise, or (4) threatens, or attempts, or gives notice that it intends to attempt unjustly to refuse to renew a franchise, then the franchised distributor whose franchise is threatened shall be entitled to recover damages from the franchisor.... (b) [...] if a franchisor unjustly refuses to deal with a franchised distributor with whom the franchisor has been dealing for at least 2 years, the franchised distributor shall be entitle to recover damages from the franchisor pursuant to subsection (a) of this section plus all other damages ... allowed under the law of this State.... 6 Del. C. § 2553. Dunkin' argues that a claim for the payment of unreasonable or excessive rent only accrues when it is charged in conjunction with a refusal or threatened refusal to renew. Plaintiffs argue that Dunkin's reading “totally emasculates” the statute and that it is absurd to suggest that charging excessive rent is illegal if demanded upon renewal of a lease but legal if demanded in the initial term. In other words, the dispute between the parties centers on whether the first sentence of subsection (j) confers an independent cause of action, since plaintiffs in Count I only allege the charging of an excessive and unreasonable rent. The Court concludes that the statute is meant to confer protection against the charging of an unreasonable or excessive rent only in the context of an already-existing franchise agreement or an accompanying sublease. That is, contrary to plaintiffs' assertions, it is not at all absurd to suggest that charging excessive rent is illegal if demanded upon renewal of a lease but legal if demanded in the initial term. The preamble to the Franchise Security Act indicates otherwise.
In re Kirkwood Kin Corp. v. Dunkin' Donuts, Inc., 1997 WL 529587, Del.Super (1997)( charging excessive rent is illegal if demanded upon renewal of a lease but legal if demanded in the initial term based on the legislative history of the DFSA, specifically. The The preamble to the Franchise Security Act indicates otherwise AN ACT ... TO PROTECT FRANCHISED DISTRIBUTORS FROM UNJUST TERMINATION OF, OR FAILURE OR REFUSAL TO RENEW THEIR FRANCHISES. … “As the title and preamble make clear, the protections of this statute are intended to protect franchised distributors only from “unjust termination of, or failure or refusal to renew their franchises.” The General Assembly was concerned with the unjust, inequitable, and coercive practices of franchisors in the context of an already-existing franchise relationship, that is, at a time when the economic balance of power rests with the franchisor. See Globe Liquor Co. v. Four Roses Distillers Co., Del.Supr., 281 A.2d 19, 23, cert. denied, 404 U.S. 873, 92 S.Ct. 103, 30 L.Ed.2d 117 (1971) (recognizing that the purpose of the Act was to protect a franchisee who is “economically dependent upon the sale of the [franchisor's] products and who has used his efforts in promoting them”); Paradee Oil Co. v. Phillips Petroleum Co., Del. Ch., 320 A.2d 769, 775 (1974), aff'd, Del.Supr., 343 A.2d 610 (1975) (citing Globe Liquor and the preamble to the Act). Once the franchise is in place, the franchisee presumably goes to great lengths and expends great amounts of time and money to ensure the success of his venture and to create a “favorable market” for the franchisor. It is in this sense that the franchisee builds up the “equity” and “fruits of [his] labor” from the franchise relationship. Prior to entering into that relationship, there is no huge inequity in the balance of power. Any potential franchisee from whom an unreasonable and excessive rent is charged as a condition of entering into the franchise relationship is free to walk away from the bargaining table. In fact, the simple laws of economics would suggest that any franchisor who constantly charges unreasonable and excessive rents as a condition of granting the franchise will quickly discover that it has few takers. Charging excessive and unreasonable rents, alone, may violate some other law, but it does not violate the Franchise Security Act. This reasoning is supported by the language of all of §§ 2552 and 2553. First, § 2552 is titled “Unjust termination of, or failure to renew, a franchise.” Second, the entire tenor of § 2552 is to speak consistently of either the termination of or the failure to renew a franchise. To attribute to the first sentence of § 2552(j) the independent cause of action which plaintiffs propose would render that sentence out of place with the remainder of the section, especially since the lead-in “Notwithstanding” clause appears to refer to an existing agreement. Third, nowhere in § 2553, the “remedies” portion of the subchapter, is a remedy given for only the charging of unreasonable or excessive rent. See 6 Del. C. § 2553, quoted supra. Rather, the damages recoverable pursuant to this chapter, described in part in subsection (c), employ phrases such as “used with respect to the terminated or unrenewed franchise” and “loss of profits ... by virtue of the terminated franchise.” 6 Del. C. § 2553(c)(1), (3)”).
That being said, the Court has grave doubts concerning whether plaintiffs will in fact be able to recover. There are a fair number of anomalies in plaintiffs' position. For example, if Dunkin' were indeed perpetrating a “scheme to obtain Plaintiffs' business”9 by charging excessive rent and granting competing franchises, then why would Dunkin' grant plaintiffs the opportunity to open a satellite franchise in downtown Wilmington? Why would Dunkin' tell O'Connor to pay himself a more generous salary as a reward for his hard work if Dunkin' was trying to drive him out of business? If the impact of the other shops' openings was, as O'Connor testified, “dramatic and immediate,” then why did plaintiffs not attempt to invoke the adverse impact procedures Dunkin' had in place? If plaintiffs are convinced that Dunkin' had a scheme to force them into default, then why did O'Connor answer “no” when asked if he had any evidence to suggest that Dunkin' was, in fact, attempting to perpetrate just such a scheme?10 How could a national plan to convert all Mr. Donut franchises to Dunkin' franchises be undertaken with the purpose of destroying plaintiffs' franchise? Plaintiffs may have a tough row to hoe, but they will get their chance. Summary judgment with respect to each of the unjust attempted and actual termination claims in Counts III, IV, V, VII, and VIII of the Second Amended Complaint is hereby DENIED. COUNT VI -- Plaintiffs allege in Count VI of the Second Amended Complaint that Dunkin' engaged in an “unjust refusal to deal” with them in violation of 6 Del. C. § 2552(i) of the Franchise Security Law. Specifically, plaintiffs allege that O'Connor requested a meeting with Dunkin' to discuss and resolve the rent and competing shop problems plaintiffs were experiencing, but Dunkin' allegedly refused to meet with plaintiffs and instead terminated the franchise agreements, brought the termination actions, and refused to allow plaintiffs to sell all or part of the business. Section 2552(i) states that “[n]o franchisor may unjustly refuse to deal with a franchised distributor with whom the franchisor has been dealing for at least 2 years.” The Court of Chancery has interpreted this subsection to “cover a situation where the franchisor has not taken specific action to terminate the franchise but is attempting to purge itself of the relationship simply by refusing to deal with the franchise distributor any longer .” Del-Way Petroleum Co. v. Phillips Petroleum Co., Del. Ch., C.A. No. 4802, Brown, V.C., 3 Del. J. Corp. L. 565, 1977 WL 2568 at *4 (Mar. 10, 1977). This reasoning comports with the title to § 2552: “Unjust termination of, or failure to renew, a franchise.” It also makes sense as a practical matter, since it would seem pointless to require a franchisor to continue to deal with a franchisee against whom it has already chosen to pursue the ultimate remedy of terminating the franchise.
A review of this case indicates that Dunkin' did not, in fact, refuse to deal with plaintiffs within the meaning of the Franchise Security Law. O'Connor himself testifies by affidavit that he did not contact Tom McHugh, his representative at Dunkin', to discuss and resolve the rent and competing shop issues until after he had received Dunkin's termination notices in August 1993. See O'Connor Aff. at 13 (Docket No. 123). Since this section is meant to cover situations where Dunkin' has not taken specific action to terminate a franchise, the fact that the actions alleged here all occurred after that specific action was taken renders them insufficient to support a cause of action for violation of 6 Del. C. § 2552(i). In light of plaintiffs' failure to offer any other evidence indicating that Dunkin' unjustly refused to deal with plaintiffs prior to its taking specific action to terminate the franchises, they have failed to state a claim under § 2552(i). Summary judgment as to Count VI of the Second Amended Complaint is GRANTED. COUNT IX -- In Count IX of the Second Amended Complaint, plaintiffs allege that Dunkin' failed to offer plaintiffs the opportunity to mediate their dispute prior to resorting to the courts, as they were contractually obligated to do under a Mediation Agreement between Dunkin' and the Center for Public Resources, Inc. (“CPR”), to which plaintiffs are third-party beneficiaries. Pursuant to the Mediation Agreement, Dunkin' voluntarily agreed to a mediation process designed to help franchisors and franchisees resolve disputes without resorting to litigation. According to plaintiffs, Dunkin' did not inform plaintiffs of the existence of this agreement, nor did Dunkin' ever offer plaintiffs the opportunity to mediate their dispute even after O'Connor first made contact with Tom McHugh in August 1993. As a result, plaintiffs allege that they suffered damages, including attorney's fees, costs, and expenses incurred in defending this litigation. The Court dealt with this claim in its June 30, 1995 opinion. In that opinion, the Court noted that Dunkin's own evidence indicated that Dunkin' did not notify plaintiffs of the possibility of mediation through the CPR program until the time when this litigation was filed. The Court assumed without deciding that Dunkin' did not notify plaintiffs of the opportunity to mediate in a timely fashion, but ruled nevertheless that summary judgment was appropriate with respect to that claim: This count] essentially is a damage claim for Plaintiffs' having lost an opportunity to mediate certain complaints before they filed suit. Only through speculation could damages be awarded on that basis. Specifically, for Plaintiffs to recover, the fact-finder would have to conclude that Plaintiffs would have succeeded in mediation, Dunkin' would have accepted the result and would not have exercised its appeal rights, or [if it did] that such an appeal would have failed, since the mediation process contemplated by the CPR program is non-binding.... Damage claims cannot rest on such a tenuous foundation. See, e.g., American Gen. Corp. v. Continental Airlines Corp., Del. Ch., 622 A.2d 1, 7 (1992), aff'd, [Del. Supr.,] 620 A.2d 856 (1992). Moreover, while the Court will not weigh the evidence now, Dunkin's contention that the parties eventually tried mediation without success lends support to the notion that Plaintiffs cannot establish a claim in [this count]. Mem. op. at 10-11 (Docket No. 63). In light of the fact that no additional evidence has been presented with respect to this claim, the Court has no reason to depart from its prior holding. For the same reasons expressed in that opinion, summary judgment is GRANTED with respect to Count IX of the Second Amended Complaint. COUNT X -- Count X of the Second Amended Complaint alleges a claim of fraudulent misrepresentation against Dunkin'. Plaintiffs claim that Dunkin' fraudulently misrepresented to them that it would help them “promote and further the business and profitability of Kirkwood” and also “not take any action detrimental to Kirkwood's business interests.” At deposition, O'Connor was asked to describe these alleged representations with more specificity and replied with the following.
I remember sitting down in my living room with Allen Lauer, who the title then was district sales manager.... I was very apprehensive over the extent to which I could remodel, the impact of this percentage rent.... [H]e took my sales up to that point and with a modest percent increase each year, which I had been more than doing to that point, he extrapolated on up past $2, 000 [A.D.2000] and said, I can remember the quotes, Look at where you will be so many years down the road. And the other comment I can remember hearing was you were the only one on Kirkwood Highway. Really trying to reassure me that I could handle both of these. O'Connor Dep. of July 18, 1996 at 29, Ex. 1F, Dunkin' Mot. for Summ. J. (Docket No. 115). But they had advice for you. They can give you help while you are working for them. So I felt secure in that. That was the first of what I would consider representations. And the second one was when Allen Lauer gave me his projection and I can still hear the words, it will be on my gravestone: You will be the only one on Kirkwood Highway. O'Connor Dep. of July 18, 1996 at 461, Ex. 1G, Dunkin' Mot. for Summ. J. (Docket No. 115). In response to a question asking for every representation, especially by a Dunkin' employee, that plaintiffs' business would grow and continue to be profitable, O'Connor stated the following: I can't give times, dates, and places. But there were times when every district sales manager I had was optimistic about with hard work and honesty that you can make a business really grow into something and make it a family business.... Rich Markell, totally forgot that he was one of the early characters back in '84. Might have been my first district sales manager.... Then there was John Campbell before it from Concord Pike, Allen Lauer, Tom McHugh, Bob Nelson. I could be leaving somebody else out. I mean, there were times when they all talked about being a Dunkin' Donut franchisee. I mean you go to ad committees meetings. This is what you can do. This what you can do to be profitable and all of that. We are here to help you. Other than that, I can't give specifics on it. O'Connor Dep. of July 18, 1996 at 463-64, Ex. 1G, Dunkin' Mot. for Summ. J. (Docket No. 115).
Plaintiffs claim that it was the representations and assurances made by Dunkin's employees that caused them to execute the lease and franchise agreements. Additionally, plaintiffs allege that these statements were false because Dunkin' charged plaintiffs unreasonable and excessive rent, licensed two competing Dunkin' franchises, failed to consult with plaintiffs about the impact of these new franchises, failed to offer those franchises to plaintiffs, granted special concessions to O'Hanlon, and terminated plaintiffs' franchise in bad faith and without good cause. One of Dunkin's arguments in favor of summary judgment on this claim is that the integration clauses of the franchise agreements bar the use of parol evidence regarding representations or assurances relating to the contract matter. While this general statement of the law is correct, it omits a well-recognized exception to the parol evidence rule. When a party alleges fraud or misrepresentation, evidence of oral promises or representations made prior to the written agreement will be admitted. Anglin v. Bergold, Del.Supr., 565 A.2d 279 (1989) (ORDER) at 4-5 (citing Scott-Douglas Corp., 304 A.2d at 317). Since at least some of the statements appear to have been made prior to the execution of the franchise and lease agreements, the Court will not grant summary judgment solely on the basis of the parol evidence rule and the integration clauses. Nevertheless, the Court finds that plaintiffs fail to state a claim for fraudulent misrepresentation. The Delaware Supreme Court has repeatedly laid out the elements of this common law cause of action: (1) a false representation, usually one of fact, made by the defendant; (2) the defendant's knowledge or belief that the representation was false, or made with reckless indifference as to the truth; (3) an intent to induce the plaintiff to act or refrain from acting; (4) the plaintiff's action or inaction taken in justifiable reliance upon the representation; and (5) damage to the plaintiff as a result of such reliance. Gaffin v. Teledyne, Inc., Del.Supr., 611 A.2d 467, 472 (1992) .11 The Court has also held that mere expressions of opinion as to probable future events cannot be deemed fraud or misrepresentation. Consolidated Fisheries Co. v. Consolidated Solubles Co., Del.Supr., 112 A.2d 30, 37 (1955). Furthermore, “any complaint alleging fraud must as a consequence include the circumstances involved, i.e., the time, place, and contents of any misrepresentation made, the identity of the person making the same and the benefit sought to be obtained.” Stutchen v. Duty Free Int'l, Inc., Del.Super., C.A. No. 94C-12-194, Toliver, J., 1996 Del.Super. LEXIS 187 (Apr. 22, 1996), mem. op. at 12 (citing Nutt v. A.C. & S., Inc., Del.Super., 466 A.2d 18, 23 (1983), aff'd, Mergenthaler v. Asbestos Corp. of America, Del.Supr., 480 A.2d 647 (1984)). This is an extension of the requirement of Superior Court Civil Rule 9(b) that “in all averments of fraud, negligence, or mistake, the circumstances constituting fraud, negligence, or mistake shall be stated with particularity.” Count X on its face fails to satisfy the requirements of Rule 9(b) and the Court's opinion in Stutchen. Plaintiffs did not allege the time or place of the misrepresentation or the identity of the person making it. Dunkin' did not move to strike the claim, and plaintiffs have since supplemented the claim with selections from O'Connor's deposition testimony. However, even this testimony fails to state a claim. With regard to Mr. Lauer's alleged statements, the Court does not understand exactly how Mr. Lauer could have known in 1987 that Dunkin' would purchase the Mister Donut corporation in 1990 and convert the O'Hanlon shop to a Dunkin' shop in 1993.
Such knowledge is necessary in order to render knowingly false, when made, his alleged statement to O'Connor that plaintiffs would be the only ones on Kirkwood Highway. Additionally, the Court does not see how Lauer's calculation of the percentage rent payments, using the formulas agreed to and clearly stated in the contracts, could have been false. Finally, Lauer's projections as to the growth of plaintiffs' business clearly were nothing more than expressions of opinion as to future events based upon the extrapolation of past data. The statements alleged to other persons are similarly non-actionable. First, O'Connor himself admits that he does not have the time, dates, or places of these alleged misrepresentations. All three are required in order to state a cause of action for fraud. While plaintiffs finally do put some names to the persons making representations, the representations O'Connor has testified to them making are nothing more than puffery, a verbal pat on the back from the franchisor meant to encourage the franchisee. Accord W & G Milford Assocs. v. Jeffcor, Inc., Del.Super., C.A. No. 89C-JN-161, Herlihy, J., 1991 Del.Super. LEXIS 229 (Apr. 12, 1991), letter op. at 4 (regarding statements made to a shopping center tenant). At best, they could perhaps be stated as opinion, which, as the Court has pointed out, is similarly non-actionable. In conclusion, Count X fails to state a cause of action for fraudulent misrepresentation as a matter of law. Summary judgment is GRANTED as to Count X of the Second Amended Complaint. COUNTS XI & XII -- Counts XI and XII of the Second Amended Complaint purport to state claims for tortious interference with existing business relationships and prospective business advantage. They do not, however, identify a specific contract or potential business opportunity allegedly compromised by Dunkin'. As the Court explicitly told plaintiffs in its earlier opinion, these specifics are a prerequisite to proceeding under these tort theories. See June 30, 1995 Mem. op. at 24-25 (Docket No. 63). The Court also told plaintiffs in no uncertain terms that they would have to “cite to actual or potential contracts, other than between themselves, possibly affected by Dunkin's behavior.” Id. at 25. The Court then allowed plaintiffs to amend their complaint so as to provide these specifics. Id. Unfortunately, plaintiffs do not appear to have understood what the Court meant by use of the phrase “specific contract or potential business opportunity.” All that plaintiffs' new but certainly not-improved tortious interference counts do is give a slightly less vague but equally uninformative general description of plaintiffs' operation of the shop.
As this Court told plaintiffs, more is required under Delaware law. In another case, the Court of Chancery cogently explained it in the following manner: [I]nterference with an existing contract requires (a) an intent to induce a breach (b) of an existing contract, (c) proximate causation, and (d) damages.... [A] showing of deliberate interference with a prospective business opportunity requires (a) the reasonable probability of a business opportunity, (b) the intentional interference by defendant with opportunity, (c) proximate causation, and (d) damages.... DeBonaventura v. Nationwide Mut. Ins. Co., Del. Ch., 419 A.2d 942, 947 (1980), aff'd, Del.Supr., 428 A.2d 1151 (1981). Here, plaintiffs have failed to demonstrate to the Court the existence of one single contract or prospective business opportunity. Citations to sales records of plaintiffs' and O'Hanlon's shops are useless because, while they might show damages, they do not show the existence of the contract or prospective business opportunity. This Court told plaintiffs that they needed to provide specific examples, yet plaintiffs failed to do so. As such, plaintiffs have failed (twice) to state a cause of action for either tortious interference with existing contracts or with prospective business opportunities. Summary judgment as to Counts XI and XII of the Second Amended Complaint is GRANTED. COUNT XIII -- Count XIII of the Second Amended Complaint alleges a veritable multitude of violations of an implied covenant of good faith and fair dealing. Plaintiffs assert that Dunkin' violated this covenant by (1) charging unreasonably and excessive rent for the Kirkwood Highway shop, (2) awarding competitive franchises in close proximity to the Kirkwood Highway shop, (3) failing to consult with plaintiffs about the impact of those franchise prior to granting them, (4) failing to offer those franchise to plaintiffs, (5) failing to investigate whether the new franchises would have an adverse impact on plaintiffs, (6) granting special privileges and concessions to the O'Hanlon franchise, which conferred a competitive advantage on O'Hanlon to plaintiffs' detriment, (7) refusing to meet with plaintiffs to discuss and resolve plaintiffs' perceived problems, (8) terminating plaintiffs' franchise, and (9) bringing these termination actions in the courts. An implied covenant of good faith and fair dealing generally exists in every contract. Katz v. Oak Indus., Inc., Del. Ch., 508 A.2d 873, 880 (1986). As the Court of Chancery has held, “[t]his obligation requires a party in a contractual relationship to refrain from arbitrary or unreasonable conduct which has the effect of preventing the other party to the contract from receiving the fruits of the contract.” Wilgus v. Salt Pond Inves. Co., Del. Ch., 498 A.2d 151, 159 (1985). It is simply a reflection of the fact that in many respects the purpose of contract law is to attempt to give effect to the reasonable expectations of the parties. See RESTATEMENT (SECOND) CONTRACTS § 205. One common way of analyzing this covenant “is to ask what the parties likely would have done if they had considered the issues involved.” E.I. DuPont de Nemours & Co. v. Pressman, Del.Supr., 679 A.2d 436, 443 (1996). See also Katz, 508 A.2d at 880 (asking “is it clear from what was expressly agreed upon that the parties who negotiated the express terms of the contract would have agreed to proscribe the act later complained of ... had they thought to negotiate with respect to that matter?”).
However, it is also true that “where the subject at issue is expressly covered by the contract, or where the contract is intentionally silent as to that subject, the implied duty does not come into play.” Dave Greytak Enters., 622 A.2d at 23. After some reflection upon the issue and consideration of the actions which plaintiffs allege constitute violations of the covenant, the Court concludes that with respect to at least some of the alleged actions, the implied covenant of good faith and fair dealing does not provide a remedy independent of the Franchise Security Law. In the Court's opinion, this common law implied covenant of “good faith” and “fair dealing” does not state an independent cause of action with respect to the actual, threatened, or attempted failure to renew or termination of a franchise relationship because the General Assembly expressly wrote that covenant into the Franchise Security Law. The Franchise Security Law expressly prohibits unjust terminations and failures to renew, whether actual, threatened, or attempted, as well as unjust refusals to deal. See 6 Del. C. §§ 2552(g), (h), (i). It defines “unjust” as being without “good cause” or in “bad faith.” See 6 Del. C. §§ 2552(a), (b). An “unjust refusal to deal” by its very terms cannot be said to be either good faith or fair dealing. To the extent, therefore, that plaintiffs make any of these allegations as breaching an implied covenant of good faith and fair dealing, these allegations are part and parcel of the General Assembly's statutory enactment. This encompasses the second, sixth, seventh, eighth, and ninth grounds listed above. Each of these grounds is separately alleged in other counts of the Complaint dealing with the Franchise Security Law,12 and any remedy which plaintiffs seek must be sought under that law. Some of the grounds alleged by plaintiffs, however, are not expressly covered by the Franchise Security Law. As such, application of the covenant as to those grounds is not precluded by the actions of the General Assembly. The Court will address each in turn. Ground 1. Charging Unreasonable and Excessive Rent. Simply stated, the Court cannot find that the mere charging of excessive and unreasonable rent violates the covenant.

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