The defendants did not present any other alternative separation mechanism, and therefore the mechanism in the agreement should be promoted. Mr. Shimshon's position that Top Team should remain a shareholder in Max-Ashdod should not be accepted. There is no possibility thatthe company and its shareholders will remain involved in the management of the store inAshdod.
- In light of all this, the court must determine that the franchise agreements were lawfully canceled. In light of the defendants' breach of the agreements, it is clear that the franchise period can be shortened and brought to an end. In light of the above, and when all the components of the franchise claim have been proven, Max is entitled to the full remedies claimed by it, first and foremost compensation in the sum of ILS 2 million, due to the fundamental breaches of the agreements, including the infringement of its trademarks.
- In addition, since the agreements were lawfully cancelled, the counterclaim filed by the franchise owners should be dismissed. In any event, they did not prove the damage caused to them. In order to substantiate their damages, they relied on the opinion of the expert on their behalf, Dr. However, this opinion suffers from many failures, first and foremost the reliance on forecast data only, without examining the true data of the branches' activity in the years following the cancellation of the franchises. Thus, for example, the opinion did not take into account the fact that for many months the branches continued to sell Max Stock's products even after the cancellation letters; the expert did not examine the plaintiff's data published on official websites (such as Maya), and preferred to rely on information taken from unofficial websites, for which there is no guarantee of the correctness of the facts described therein; and instead of relying solely on forecasted data, it was already possible, at the time of the opinion to be prepared, to rely on audited reports up to 2021 and additional data thereafter. This was not done, and therefore the claimed damage was not proven, and it is not possible to rely on the expert opinion on their behalf.
Main Arguments of the Defendants and Counter-Plaintiffs
- According to the defendants and the plaintiffs, Max seeks to prove fraud, and that in fact Mr. Shimshon invested in her competitor, through a straw man, and that it was his brother Michael who held shares in the Superstock chain for him. It further tries to show that even if it was Mr. Shimshon who violated the terms of confidentiality and non-competition, the other defendants are also guilty of this and it is justified to cancel the agreements against them.
All of this was not proven by Max andMr. Max . The evidence on which the plaintiff relied, including Mr. Sheetrit's recording, is baseless and has no evidentiary value. It was proven in the course of the proceeding that Mr. Shimshon did not purchase the shares of Super-Stock, and that he did not compete with the Max-Stock chain.
- For the purpose of the cancellation, Mr. Max made do with his instincts, and did not bother to make a minimal inquiry with Mr. Shimshon. The decision to cancel the agreements was capricious and scandalous. The plaintiff invested a great deal in casting aspersions on the defendants' evidence, but forgot that she had to prove that the agreements were lawfully canceled, which she did not do.
- The defendants agree that they are subject to the non-compete clauses in the agreements, but according to them, these were not breached. The agreements in question were signed when the defendants were not represented, and they still took care to ensure the existence of commercial terms in their favor. Thus, it was important to them that the license period would not be limited in time. They rejected an attempt to limit the duration of the license, and therefore the agreements were drafted in such a way that the concession period would remain in place until the date on which the agreements would be canceled, and the ability to cancel was limited to individual grounds. This agreement on the part of Mr. Max enabled their reliance on this business opportunity, which they sought to maximize. In addition, the concessionaires were given the first right in the agreements to establish additional branches of the Max-Stock chain if they were to open in Bat Yam or Sderot. This matter was also very important to them, as it was an option with great economic value, which prevented competition from the Max Stock chain with the relevant branches.
- Therefore, Mr. Max and Max must establish a breach of the agreements that justifies their cancellation. And since Yam is in fact alleging fraud , it must meet the increased burden required to substantiate this claim. And here, it is not established that Mr. Shimshon is a partner in the Superstock chain; that he or the other defendants violated the non-competition clause; or that those pretentious breaches became known to Mr. Max only shortly after the cancellation letters were sent. In fact, Mr. Max was looking for a pretext to cancel the franchise agreements, while admitting that this was a less profitable model for him than the direct operation of the branches.
In any event, Max sent the cancellation notices with considerable delay, more than six months after it learned of the purchase of the shares by Michael. It acted in extreme bad faith whenit acted without trying to clarify the facts vis-à-vis the defendants or any of them. And things are beautiful, with the necessary changes, also in relation to its attempt to enforce the separation of Max Ashdod.
- The "evidence" on which the plaintiff relies is like a broken reed. She did not present all the recordings she made, and entire sections of the transcript were classified as unclear. The private investigator who was sent was aim-oriented, and tried to plant the "correct" answer in the mouth of Mr. Shitrit with whom he spoke, in order to make him say that it was Mr. Shimshon who had invested in the purchase of the shares of the Superstock company. In any case, the party to the conversation, Mr. Shitrit, came to testify and testified that nothing had ever happened, and that Mr. Shimshon's brother was not a straw man.
Contrary to what the plaintiff claimed, Mr. Max tried to make use of the lawsuit filed by Mr. Haimovich in the Labor Court, in order to rely on it and show that Mr. Shimshon invested in Superstock himself, but the said statement of claim does not substantiate this.