Civil Case (Tel Aviv) 47423-07-18 Max Management Israel Ltd. (formerly Max Stock Ltd.) v. Naftali Shimshon

And in the matter

The Plaintiff                         Max Management Israel Ltd.”From

Civil Case 51268-03-19     Anonymous10 B”20 Attorney Eyal Abramov and Talia Goldbaum

Abramov & Co.  Law Offices

Against

The Defendant                    Top Team Wise Investment Ltd.

Civil Case 51268-03-19     A”10 B”20 Attorney David Zilberbaum, Ronen Harpaz and Mohammad Abbasa

Zilberbaum & Co.

Judgment

A company with a chain of stores entered into franchise agreements to operate three branches.  Two of them were operated by the franchisees, and the third was jointly operated by a company, of which the parties were shareholders.  The various agreements included stipulations to maintain confidentiality and prevent competition.

The owner of the chain suspected that one of the franchisees had become a shareholder in a competing company that was established, and that the "living spirit" behind its activity.  As a result, he canceled both agreements, and argued that he should be allowed to implement the separation mechanism in the joint operating agreement, and to acquire the share of the violators, according to him, for breach of trust, as regulated in the agreement there.

Was the cancellation of the agreements lawful? Did the chain owner exercise the cancellation power in good faith, and on the basis of an adequate infrastructure, taking into account the relationship between the parties? And if not, will the franchise owners be able to compete with it by immediately activating competing branches? Have they established their entitlement to the compensation claimed by them? And should the separation mechanism in the joint operating agreement be activated?

The Ottoman Settlement [Old Version] 1916In all of these and other cases, the claims on the agenda must be decided.

12-34-56-78 Chekhov v.  State of Israel, P.D.  51 (2)Background

1. The plaintiff, Max Management Ltd. (formerly Max Stock Ltd.; hereinafter: Max or Max Stock), operates a chain of dozens of branches throughout the country, where various consumer goods are sold such as household items, stationery, work tools, party equipment and more.  Some of the branches are operated by franchisees with which it contracts.

Mr. Uri Max (hereinafter: Mr. Max) is a shareholder in Max Stock Company (in a thread).  He is the one who founded the company, issuer and brings it, and shortly after the filing of the first lawsuit, which is pending a decision in this proceeding, he also served as its CEO.