Business Monday: Federal suit says franchise agreements were violated in Aspen
The ex-operator and owner of two retailers that sell luxury jewelry and watches is claiming the high-end brands they worked with violated their franchise agreements after opening two corner boutiques in downtown Aspen.
Les Bijoux Aspen LLC is one of five plaintiffs — the four others are Lex Bijoux-named entities based in Florida — that are suing 10 defendants in federal court on allegations that they ran afoul of franchise agreements. The allegations also say franchise agreements were breached in Florida where other boutiques are located.
Les Bijoux Aspen once owned the Van Cleef & Arpels Inc. and Panerai boutiques at the corner of East Hyman Avenue and South Mill Street in downtown Aspen. The two stores currently have different, separate owners.
In its lawsuit, Les Bijoux Aspen claims the New York-based brand Van Cleef & Arpels Inc. in 2006 entered into franchise agreements where Les Bijoux Aspen and its Florida affiliates were to open stores in their respective markets.
Part of those agreements included Les Bijoux Aspen spending $3.79 million to build and decorate the store under the direction and control of Van Cleef & Arpels, the suit said. Van Cleef & Arpels “agreed to pay for these expenditures, but failed and refused to do the same,” said the complaint, which was transferred to federal court in Palm Beach, Florida, last week from Florida state court.
Plaintiff Les Bijoux Aspen and its associated entities also claim they spent $1.2 million on the build-out costs of the Panerai boutique as a flagship store. But Panerai’s corporate office did not acknowledge it as a flagship store while “stealing (the plaintiffs’) customers for their own corporate boutiques” in New York, accused the suit.
By breaching their agreements, the defendants are alleged to owe more than $7 million in build-out costs alone for the stores in Aspen and Florida.
The suit’s two counts are violation of the Florida Franchise Act and breach of implied covenant of good faith and fair dealing.
In a filing last week, attorneys for the defendants said they will need more time to review the complaint before they formally reply to its allegations.
“The complaint includes claims by five plaintiffs against 10 defendants allegedly based on violations of over 300 pages of contracts attached to the complaint,” the filing said. “Additional time is needed so that defendants and their counsel have sufficient time to review and investigate the allegations asserted in the complaint and to gather the necessary information before responding to the complaint.”
Editor’s note: This report has been updated to clarify the relation between the current and former owners of the Aspen stores and those involved in the lawsuits. The current owners of the Van Cleef & Arpels Aspen Boutique and the Roger DuBuis Aspen Boutique are not parties to the lawsuit.
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The 10th Circuit Court of Appeals this week affirmed the dismissal of a lawsuit against the city of Aspen that challenged its zoning laws concerning Mill Street Plaza, which is home to locally serving businesses.