Sean Lupton-Smith is the owner of Southlake Bread Company, LLC, Airport Bread Company, L.L.C., Concourse C Bread Company, LLC, Forsyth Bread Company, LLC, and Knoxville Bread Company hereinafter “Smith”. These companies are each franchises of Atlanta Bread Company International, Inc. On February 14, 2006, Atlanta Bread Company served Smith with Notices of Termination of Franchise Agreement, with an effective date of February 24, 2006. These termination notices were served after Atlanta Bread Company discovered that Smith was operating a competing business, called PJ’s Coffee and Lounge, using Atlanta Bread Company’s methods and proprietary information. Smith filed a complaint seeking to enjoin the terminations and obtained a temporary restraining order. Subsequently the temporary restraining order was lifted and Atlanta Bread Company acquired the assets of the five stores from Smith for $840,000. Smith then amended his complaint to seek damages for alleged wrongful termination of the franchise agreements. The issues at dispute in the case rested on certain restrictions included in the franchise agreements. Following a series of motions and cross-motions, the trial court entered partial summary judgment in favor of Smith, holding that Restriction 1 was unenforceable under a standard of strict scrutiny and that Restriction 1 could not be severed from a post-termination restrictive covenant in Restriction 2, which the court also held was unenforceable. The trial court denied Smith’s motion for partial judgment on the pleadings as to wrongful termination of the franchise agreements, and it denied Atlanta Bread Company’s cross-motion for summary judgment.
In Case Number A08A0348, Atlanta Bread Company appeals, alleging the trial court erred in concluding that 1 a restriction on in-term competition contained in the franchise agreements was invalid on public policy grounds as a matter of law; 2 a geographic limitation is required as a matter of law and Restriction 1 was, therefore, overbroad and vague; and 3 there is a legal relationship between the putative invalidity of Restrictions 1 and 2. In Case Number A08A0349, Smith appeals, alleging the trial court erred in denying his motion for partial judgment on the pleadings with respect to his wrongful termination claim. These cases have been consolidated for appeal.
