The Middle District of Florida recently declined to dismiss a franchisee’s breach of contract claim against its franchisor arising from the acquisition of the franchisor by an allegedly competitive business. Maryland Media Sols. LLC v. Valpak Direct Mktg. Sys., LLC, 2026 WL 1678330 (M.D. Fla. June 10, 2026). Franchisee Maryland Media Solutions sued Valpak Direct Marketing Systems, the franchisor of a cooperative direct-mail advertising franchise system. Maryland Media asserted breach of contract and Florida Deceptive and Unfair Trade Practices Act (FDUTPA) claims against Valpak, alleging that Valpak breached its franchise agreement and the implied covenant of good faith and fair dealing after Valpak was acquired by new ownership that included competing direct mail advertiser Clipp. Specifically, Maryland Media alleged that Valpak allowed Clipp to compete in Maryland Media’s territory and allowed Clipp to use confidential franchisee information to its competitive advantage. Maryland Media also alleged that Valpak’s conduct violated the FDUTPA by enabling unfair methods of competition and diverting business away from Maryland Media. Valpak moved to dismiss all claims.
The court declined to dismiss the contract-based claims, including breach of the implied covenant, because those claims hinged on whether the franchise agreement granted Maryland Media exclusivity in its territory, whether the agreement required Maryland Media’s consent before Valpak introduced new products and services, and whether Valpak reserved rights permitting its alleged conduct. The court concluded that resolution of conflicting contractual interpretations is a summary judgment issue and not appropriate on a motion to dismiss. Additionally, the court concluded that the implied covenant claim was not duplicative because Valpak’s alleged bad-faith exercise of its contractual discretionary authority plausibly extended beyond the express breach of contract claim. With regard to Maryland Media’s FDUTPA claim, the court determined that Maryland Media failed to adequately allege an “injury to a consumer,” an essential element of an FDUTPA claim. Maryland Media alleged that it was a Valpak franchisee, but the court distinguished between a franchisee and a “purchaser of goods or services,” finding that the purchase of a franchise did not render Maryland Media a “consumer” within the meaning of the FDUTPA. Nevertheless, the court found that Maryland Media’s “fleeting reference” to harm to customers of Valpak and Maryland Media, who were confused by Clipp’s post-acquisition conduct and complained of double billing, meant that Maryland Media may be able to state a claim under the FDUTPA arising from harm to those consumers. Thus, the court dismissed Maryland Media’s FDUTPA claim without prejudice and granted Maryland Media leave to amend.
*J. Cayd Bezanson is a Summer Associate for Lathrop GPM who contributed to the writing of this post.