could terminate the agreement with or without cause by sending a thirty day notice of termination.
Plaintiff and Defendant entered into a revised agreement on August 6, 1984. The terms of this agreement were substantially similar to the first contract. In 1989, Du Pont again revised its "Jobber" agreement and disseminated this agreement to Du Pont Jobbers around the country for their signature. The terms of this contract, however, differed in a number of crucial points from the previous agreements. The proposed agreement provided that Plaintiff would be solely responsible for all claims arising out of its sales to persons other than refinishers, or in systems for uses other than those recommended or approved by Du Pont. The contract also limited Plaintiff's right to transfer ownership of its business to employees or other persons. Plaintiff's president refused to sign this new agreement and continued working under the terms of the 1984 contract. On June 5, 1989, Defendant formally terminated the old "Jobber" agreement.
In Count I of the complaint, Plaintiff contends that it was a franchisee of Defendant under the provisions of the IFDA. Count II of the complaint alleges that as a result of Plaintiff's refusal to sign the revised contract, Du Pont discriminated against them, in violation of section 18 of the IFDA, by not selling them "a specific Du Pont product" and terminating the agreement without good cause. Finally, Plaintiff alleges in Count III that Defendant terminated their agreement in violation of section 19 of the IFDA which requires a franchiser to show good cause before it can terminate a franchise agreement.
Defendant moves to dismiss this complaint pursuant to Fed. R. Civ. P. 12 (b)(6) for failure to state a cause of action upon which relief can be granted. Defendant contends that under the express terms of the contract, Plaintiff was an independent contractor and no franchise relationship existed. Defendant also asserts that the type of discrimination alleged does not give rise to a cause of action under the IFDA. Finally, Defendant contends that since Plaintiff was not a franchisee, it was free to terminate the agreement pursuant to the terms of the contract which allow either party to terminate the agreement with or without cause. Consequently, Defendant urges this Court to dismiss the action.
The Court will not dismiss an action for failure to state a claim under Fed. R. Civ. P. 12 (b)(6) unless it is clear beyond doubt that Plaintiff can prove no set of facts in support of its claim which would entitle it to relief. Hishon v. King & Spalding, 467 U.S. 69, 73, 104 S. Ct. 2229, 2233, 81 L. Ed. 2d 59 (1984); Conley v. Gibson, 355 U.S. 41, 45-46, 78 S. Ct. 99, 101-102, 2 L. Ed. 2d 80 (1957); Vaden v. Village of Maywood, 809 F.2d 361, 363 (7th Cir.), cert. denied, 482 U.S. 908, 107 S. Ct. 2489, 96 L. Ed. 2d 381 (1987). The Court will accept all well-pleaded allegations in the complaint as true. Vaden, 809 F.2d at 363; Doe v. St. Joseph's Hospital of Fort Wayne, 788 F.2d 411, 414 (7th Cir. 1986). Additionally, this Court will view the allegations in a light most favorable to the non-moving party, in this case Plaintiff, P & W Supply. Car Carriers, Inc. v. Ford Motor Co., 745 F.2d 1101, 1106 (7th Cir. 1984); Wolfolk v. Rivera, 729 F.2d 1114, 1116 (7th Cir. 1984).
The first count of the complaint alleges that Plaintiff was a franchisee of Defendant under the Illinois Franchise Disclosure Act. The IFDA regulates the relationship between franchisees and franchisers in the State of Illinois. The statute's primary purpose is to deal with the "perceived losses" suffered by Illinois residents where franchisers fail to disclose full and complete information regarding the franchise relationship. Ill. Rev. Stat. ch. 121 1/2, par. 1701. The Act requires that franchises be registered with the Attorney General prior to sale, prohibits fraudulent or deceptive practices in connection with the sale of franchises, bans certain types of discrimination among franchises and regulates a franchiser's ability to terminate a franchise relationship. Despite the increasing number of franchises in the state, Illinois courts have only rarely discussed or interpreted the IFDA. See, e.g., My Pie Intern. Inc. v. Debould, Inc., 687 F.2d 919, 922 (7th Cir. 1982) ("Although [the IFDA] has been on the books for more than eight years, there has been virtually no judicial interpretation of it, and we must guess how the Illinois courts would resolve several novel questions under the act"); Proimos v. Fair Automotive Repair, Inc., 808 F.2d 1273, 1276 (7th Cir. 1987) ("Almost no state cases discuss [the IFDA]. Another four years have passed without a significant new case in the courts of Illinois on the subject").
By its terms the IFDA applies only to "franchises." The statute defines a franchise as:
a contract or agreement, either expressed or implied, whether oral or written, between two or more persons by which: