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AFC Franchising, LLC v. Fabbro

United States District Court, N.D. Alabama, Northeastern Division

December 6, 2019

LAURA FABBRO, Defendant.



         Laura Fabbro operates an urgent care franchise on behalf of AFC Franchising, and is purportedly in breach of the franchise agreement for refusing to use the franchise name. Doc. 1. AFC Franchising filed this lawsuit to enforce the agreement. Id. Presently before the court is Fabbro's motion to dismiss the case, arguing that AFC waited too late to file.[1] Doc. 24. Although AFC Franchising filed the claim within the relevant statute of limitations, the current motion centers on whether it filed this lawsuit within the abbreviated period provided for in the franchise agreement. More specifically, the issue is choice of law: Maryland law, which the parties agreed would govern the contract, would honor the contract's abbreviated period, but Alabama law, the law of the forum, would not. For the reasons stated below, the motion to dismiss is due to be denied.


         The amount in controversy exceeds $75, 000, and the parties are completely diverse, as AFC Franchising is a citizen of Alabama and Fabbro is a citizen of New Jersey. Doc. 1 at 1; see also Docs. 20, 21-1. Consequently, diversity jurisdiction exists because “the matter in controversy exceeds the sum or value of $75, 000” and is between “citizens of different States.” 28 U.S.C. § 1332(a)(1); see also Underwriters at Lloyd's, London v. Osting-Schwinn, 613 F.3d 1079, 1085 (11th Cir. 2010).


         A complaint must contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). A defendant may move to dismiss a complaint that fails “to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). “To survive a motion to dismiss, ” and to meet the pleading requirements of Rule 8(a)(2), “a complaint must contain sufficient factual matter, accepted as true, to state a claim that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (citation omitted). A “complaint does not need detailed factual allegations, but the allegations must be enough to raise a right to relief above the speculative level.” Speaker v. U.S. Dep't of Health & Human Servs. Centers for Disease Control & Prevention, 623 F.3d 1371, 1380 (11th Cir. 2010) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 570 (2007)). Mere “labels and conclusions” or “a formulaic recitation of the elements of a cause of action” are insufficient. Iqbal, 556 U.S. at 678 (citation omitted). In reviewing a motion to dismiss under Rule 12(b)(6), the court “must accept all facts in the complaint as true and view those facts in the light most favorable to the plaintiff.” Sun Life Assurance Co. v. Imperial Premium Fin., LLC, 904 F.3d 1197, 1207 (11th Cir. 2018).


         The underlying dispute is a curious case of a franchisee refusing to use the franchise name. Fabbro operates an urgent care facility pursuant to a franchise agreement with AFC Franchising. The agreement grants Fabbro a license to own and manage an urgent care facility, and in exchange Fabbro agrees to operate the facility consistent with AFC Franchising's rules and to pay an annual royalty. See doc. 1-1 at 6-7, 13. Under the agreement, Fabbro consents to use the franchise's “Marks” as the “sole identification” of the business.[2] Doc. 1-1 at 18.

         When Fabbro first executed the agreement in 2009, it was with Doctors Express Franchising, a limited liability company based in Maryland. Doc. 1 at 2; Doc. 1-1 at 6. The mark for Doctors Express Franchising was “Doctors Express, ” and Fabbro used this mark when she opened her facility in 2010. Doc. 1 at 2; Doc. 1-1 at 6.

         The franchise later changed hands beginning in 2012, when DRX Urgent Care, LLC acquired the Doctors Express system. Doc. 1 at 3. Then, in 2013, “an affiliate” of AFC Franchising acquired the Doctors Express system from DRX. Id. These acquisitions included the assignment of the Doctors Express franchise agreements, including the agreement with Fabbro. Id. As a result, AFC Franchising assumed the rights of the franchisor under the agreement with Fabbro.[3] Id.

         In 2015, AFC Franchising decided to discontinue the use of the “Doctors Express” name and mark. Doc. 1 at 5. As an interim measure, AFC Franchising directed its franchisees to change their names to “AFC Doctors Express.” See Id. Shortly thereafter, AFC Franchising directed its franchisees to complete the transition to the names and marks “American Family Care” and “AFC Urgent Care.” See Id. Both times, Fabbro refused. Id. at 7. Nearly 200 clinics operate under the “American Family Care” or “AFC Urgent Care” name, id. at 3, and apparently Fabbro's “clinic is the only former ‘Doctor's Express' clinic nationwide that is still using the ‘Doctors Express' name and mark, ” id. at 8.

         The franchise agreement permits the franchisor to order the franchisee to change its name:

If it becomes advisable at any time for us and/or you to modify or discontinue using any Mark and/or to use one or more additional or substitute trade or service marks, you agree to comply with our directions within a reasonable time after receiving notice.

Doc. 1-1 at 18. The agreement continues in broad terms:

Our rights in this [section] apply to any and all of the Marks (and any and all portion of any Mark) that we authorize you to use in this Agreement. We may exercise these rights at any time and for any reason, business or otherwise that we think best. You acknowledge both our right to ...

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