What was the filing date of the Gre-ter Enterprises, Inc. v. Management Recruiters International, Inc. case?
Management_Recruiters Franchise · 2024 FDDAnswer from 2024 FDD Document
Gre-ter Enterprises, Inc. v. Management Recruiters International, Inc., et al, Docket No. 29D-1709-PL-008320, filed September 7, 2017 in the Hamilton County, Indiana Superior Court. Gre-ter Enterprises, Inc. ("Gre-Ter"), an entity having three franchise agreements with MRI dating to August 17, 1994, brought claims alleging MRI breached its franchise agreements, violated Indiana franchise laws by improperly using monies from the Marketing and Public Relations Fund, failed to provide an accounting of the Marketing and Public Relations Fund and improperly allowed members in Gre-ter's territory ("encroachment"). Gre-ter also alleged that MRI failed to comply with Indiana's franchise registration and disclosure laws, and with the Indiana Deceptive Franchise Practices Act. The plaintiff sought compensatory, statutory, and punitive damages, and attorneys' fees and costs.
The matter was removed to the United States District Court for the Southern District of Indiana, Case No. 1:17-cv-03554-SEB-DLP, and MRI filed a Motion to Dismiss all counts. In June 2018, the Court dismissed all of Gre-Ter's claims except for the encroachment claim. MRI filed a counterclaim in July 2018 alleging breach of contract, requesting an accounting for Gre-ter's failure to pay royalties and advertising fees and an order that Gre-Ter submit monthly reports to MRI as required by the Franchise Agreement. In January 2019, MRI filed an amended counterclaim alleging additional breaches of contract and a request for accounting. On January 31, 2019, MRI and Gre-ter entered into court ordered mediation and came to a settlement, which was read into the record before the Court.
On March 20, 2019 the parties entered into a written settlement agreement whereby Gre-ter agreed: 1. to make payment of $300,000 to MRI in full settlement of all of MRI's claims; 2. to consolidate three franchise agreements into one franchise agreement; 3. to eliminate all exclusive territorial rights and grant Gre-Ter the right to operate from a single office in Carmel, Indiana; 4. to terminate MRI's duty to pay Gre-Ter supplemental royalties for third party members located within its former exclusive territory; and 5. to resume operation and performance of all obligations under the amended franchise agreement. MRI agreed to 1. amend Gre-ter's prior tiered royalty structure of to a flat rate royalty structure of 3%; and 2. to provide Gre-ter an early termination option upon 90 days' notice and payment by Gre-Ter of a material termination fee equal to average monthly royalties multiplied by the remaining term of the agreement. The parties agreed not to disparage each other, to mutually release one another, and to keep the settlement terms confidential, except as
Source: Item 3 — LITIGATION (FDD pages 12–14)
What This Means (2024 FDD)
According to Management Recruiters' 2024 Franchise Disclosure Document, the case of Gre-ter Enterprises, Inc. v. Management Recruiters International, Inc., et al, was filed on September 7, 2017, in the Hamilton County, Indiana Superior Court. The plaintiff, Gre-ter Enterprises, Inc., had three franchise agreements with Management Recruiters dating back to August 17, 1994. Gre-ter brought claims against Management Recruiters alleging breach of contract, violations of Indiana franchise laws related to the Marketing and Public Relations Fund, failure to provide an accounting of the fund, and improper encroachment into Gre-ter's territory. Gre-ter also claimed that Management Recruiters failed to comply with Indiana's franchise registration and disclosure laws, as well as the Indiana Deceptive Franchise Practices Act. Gre-ter sought compensatory, statutory, and punitive damages, along with attorneys' fees and costs.
The case was later moved to the United States District Court for the Southern District of Indiana. Management Recruiters filed a Motion to Dismiss all counts, and in June 2018, the Court dismissed all of Gre-Ter's claims except for the encroachment claim. Management Recruiters then filed a counterclaim in July 2018 alleging breach of contract and requesting an accounting for Gre-ter's failure to pay royalties and advertising fees, as well as an order for Gre-ter to submit monthly reports. In January 2019, Management Recruiters filed an amended counterclaim alleging additional breaches of contract and a request for accounting.
In January 2019, Management Recruiters and Gre-ter entered into court-ordered mediation, resulting in a settlement that was read into the record before the Court. On March 20, 2019, the parties formalized the settlement in a written agreement. Gre-ter agreed to pay $300,000 to Management Recruiters to settle all claims, consolidate three franchise agreements into one, eliminate all exclusive territorial rights, operate from a single office in Carmel, Indiana, and terminate Management Recruiters' duty to pay supplemental royalties. Management Recruiters agreed to amend Gre-ter's royalty structure to a flat rate of 3% and provide an early termination option with 90 days' notice and payment of a termination fee. Both parties agreed not to disparage each other, to mutually release one another from all claims, and to keep the settlement terms confidential, except as required by law.