Still, on this question I am exempt from deciding. This is because this was not the reason for cancellation presented by Max-Stock. As we have seen, Mr. Shimshon admitted to giving the loan from the very beginning, and yet throughout it the plaintiff insisted that this was a false pretext, and that his brother was in fact a "straw man". As we have seen, it is important to present the exact cause of cancellation (see above at paragraph 64), both by virtue of the general law, and certainly this is the case with respect to a franchise contract that establishes a list of cases in which it will be possible to cancel the agreements.
At the same time, I am not sure that taking this route would have contributed much to the plaintiff. In such a case, there was no direct competition, and it is doubtful whether there was room to cancel the concessions in respect of the loan, without a dialogue between Mr. Max and Mr. Shimshon. It is not certain that in these circumstances there was an indirect breach of the non-competition clause, because it is possible that Mr. Shimshon's brother could have easily received other sources of financing. No data has been presented to me that can make this case more accurate from an economic point of view.
And even if it were found that there is a problem of indirect support for competition, this is an issue that can be corrected. If it had turned out that the matter was unacceptable to Mr. Max, and that failure to correct it might lead to the cancellation of the franchises, it is possible that Mr. Shimshon would have turned to his brother, asking him to cancel that loan, and to take a loan from a third party. In any case, it does not appear that it would have been able to justify the immediate and sweeping cancellation of the franchises in the manner in which this was done.
- And one more concluding note, Mr. Max testified that he was personally hurt by the remarks, and I was impressed by the authenticity of the injury. In this regard, Mr. Shimshon must also do some soul-searching. He should have informed Mr. Max in advance that he intends to enlist the aid of his brother and assist him in financing. This is not a mere loan, but a loan that can assist the activity of a competing business. This was not done. I do not believe that this justifies the harsh reaction of the cancellation of the franchise agreements. Max's subjective anger cannot be a substitute for meeting the obligations of objective good faith. Such a prior request was not made, and still this does not justify the firm and decisive cancellation of the franchise agreements in the manner in which things were done.
Interim Summary
- The cancellation by Max Stock of the franchise agreements for the operation of the branches in Bat Yam and BatRutBoulevard was done unlawfully. There was no basis for a breach that could justify such a cancellation. The matter has the force to be conducted in real time, taking into account the infrastructure that was in front of Mr. Max's eyes before the act of cancellation (ex ante), and their power was not exhausted even when they were examined retroactively (ex post) in this court.
The competition of the Big Stock Company in the Max Stock Company
- When the franchise agreements were canceled, the defendants in the franchise lawsuit worked to create a new brand - Big-Stock - through which they sought to continue operating in the field. Of course, in this way, they can be considered to compete withMax-Stock.
The question therefore arises whether in their activity they violated the non-competition clauses to which they were bound? Do these terms remain in effect even after the cancellation of the agreements? Max Stock answers these questions in the affirmative, while I will answer them in the negative: in the circumstances of the present case, when the agreements were unlawfully cancelled, there was nothing wrong with the defendants continuing their activity, while branding a new chain.