Pjc Mgmt. Grp., LLC v. Maaco Franchisor Spv LLC

PJC Mgmt. Grp., LLC v. MAACO Franchisor SPV LLC, 2026 NCBC 37.

STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE
SUPERIOR COURT DIVISION
MECKLENBURG COUNTY 25CV059334-590

PJC MANAGEMENT GROUP, LLC,
a North Carolina limited liability
company; PHILLIP J. COLLINS;
J&A COMPANIES INC., a Nevada
corporation; PVA CAPITAL LLC, a
Virginia limited liability company;
SHORE CAPITAL, LLC, a Virginia
limited liability company; LEWVIA
INC., a Texas corporation; HOLLAS
ENTERPRISES, LLC, a Texas
limited liability company; MFINCH
& WPERRY SOLUTIONS, INC., a ORDER AND OPINION
Georgia Corporation; WILLIAM ON MOTION TO DISMISS
PERRY, and MICHAEL FINCH,

Plaintiffs,

v.

MAACO FRANCHISOR SPV LLC, a
Delaware limited liability company,
formerly known as MAACO
FRANCHISING, LLC and
MAACO FRANCHISING, INC;
DRIVEN BRANDS INC.; and
DRIVEN SYSTEM LLC,

Defendants.

1. This case arises from a contract dispute between a franchisor and some of

its franchisees. Defendants have moved to dismiss the complaint in its entirety under

Rule 12(b)(6) of the North Carolina Rules of Civil Procedure. (See ECF No. 9.) For

the following reasons, the Court GRANTS in part and DENIES in part the motion.

Morningstar Law Group, by Keith P. Anthony, and The Law Office of
Mario L. Herman, by Mario L. Herman and Gregory O. Herman, for
Plaintiffs PJC Management Group, LLC, Phillip J. Collins, J&A
Companies Inc., PVA Capital LLC, Shore Capital, LLC, LEWVIA Inc.,
Hollas Enterprises, LLC, MFinch & WPerry Solutions, Inc., William
Perry, and Michael Finch.
Robinson, Bradshaw & Hinson, P.A., by Adam K. Doerr, and DLA Piper
LLP (US), by Kyle Orne, John F. Verhey, and Madeline A. Cordray, for
Defendants MAACO Franchisor SPV LLC, Driven Brands Inc., and
Driven Systems LLC.

Conrad, Judge.

I.
BACKGROUND

2. The Court does not make findings of fact on a Rule 12(b)(6) motion to

dismiss. The following background takes as true the allegations in the complaint.

3. Defendant MAACO Franchisor SPV LLC is the franchisor of a chain of

vehicle painting and auto body repair businesses. Defendants Driven Systems LLC

and Driven Brands, Inc. are MAACO’s direct and indirect parent companies. (See

Compl. ¶¶ 16–18, 35, ECF No. 3.)

4. Plaintiffs are franchisees of MAACO. As a group, they own and operate

nearly fifty franchises across the country, including in the Carolinas, Georgia, Texas,

California, and other States. (See Compl. ¶¶ 15, 26–34.)

5. There are dozens of franchise agreements at issue (essentially, one for each

franchise), but they are all substantially similar. Under these agreements, Plaintiffs

must pay MAACO weekly marketing fees. MAACO is supposed to use the fees for

nationwide advertising and other marketing efforts, which may include not only the

costs of ads but also the costs of developing and administering marketing programs.

The goal is “to maximize general public recognition and patronage” of the MAACO

brand “in the manner determined to be most effective by MAACO.” To ensure

accountability, MAACO must “provide an annual statement of receipts and
disbursement with respect to marketing fees” when requested by a franchisee.

(Franchise Agrmt. § 6.1(B), ECF No. 10.1; see also Compl. ¶¶ 40, 41.)

6. MAACO’s franchise disclosures include guarantees by Driven Systems and

Driven Brands, in which each “absolutely and unconditionally guarantee[d] to

assume the duties and obligations” of MAACO under the franchise agreements. Each

“guarantee continues until all such obligations of [MAACO] . . . are satisfied or until

the liability of [MAACO] to its franchisees under the Franchise Agreement has been

completely discharged, whichever first occurs.” (Compl. ¶¶ 24, 25.)

7. Administration of the advertising fund has been a source of friction for

MAACO and its franchisees since 2020. Around that time, MAACO allegedly scaled

back its television advertising, shuttered its in-house ad agency in favor of using

independent agencies, and raised administrative fees while cutting marketing

expenditures. These changes did not sit well with Plaintiffs, who began complaining

of a sharp downturn in customer business. When Plaintiffs and other franchisees

demanded an accounting of receipts and disbursements, MAACO balked. (See Compl.

¶¶ 43–45, 50, 52, 54–56.)

8. By 2024, a group of franchisees was so displeased with what they perceived

as MAACO’s stonewalling that they formed an association to coordinate their

communications with the franchisor. Through counsel, the association accused

MAACO of a “lack of transparency” and lamented the “climate of distrust” that had

ensued. In mid-2025, MAACO responded by providing a massive spreadsheet.

Although the complaint does not detail the spreadsheet’s contents, Plaintiffs allege
that the spreadsheet “raised more questions than it answered” and “failed to address

the fundamental question of where the Plaintiffs’ advertising dollars went.” Indeed,

Plaintiffs sought further explanation, specifically asking about anomalous

transactions appearing in the spreadsheet as well as unexplained spikes in

administrative fees. As alleged, MAACO did not respond to this inquiry. (Compl.

¶¶ 45–49, 57–59.)

9. As this dispute over the advertising fund was coming to a head, Plaintiffs

began to question certain charges that MAACO had assessed against them.

According to Plaintiffs, many charges were unsubstantiated, and MAACO

acknowledged accounting errors stemming from its transition to a new software

system. (See Compl. ¶¶ 63, 64.)

10. Plaintiffs now believe that MAACO is withholding data about its advertising

programs because it has been misusing its franchisees’ weekly fees for purposes

unrelated to advertising and marketing programs. In their complaint, Plaintiffs

assert claims against MAACO for breach of the franchise agreements, breach of the

implied covenant of good faith and fair dealing, accounting, unfair or deceptive trade

practices under N.C.G.S. § 75-1.1, and declaratory judgment. Plaintiffs also claim

that Driven Systems and Driven Brands, having guaranteed MAACO’s performance,

are jointly liable for any breach of the franchise agreements.

11. MAACO, Driven Systems, and Driven Brands have moved to dismiss all

claims against them. Their motion is fully briefed, and the Court held a hearing on

1 April 2026. All parties were represented by counsel. The motion is ripe.
II.
ANALYSIS

12. A Rule 12(b)(6) motion to dismiss “tests the legal sufficiency of the

complaint.” Isenhour v. Hutto, 350 N.C. 601, 604 (1999) (citation and quotation marks

omitted). The motion should be granted only when “(1) the complaint on its face

reveals that no law supports the plaintiff’s claim; (2) the complaint on its face reveals

the absence of facts sufficient to make a good claim; or (3) the complaint discloses

some fact that necessarily defeats the plaintiff’s claim.” Corwin v. Brit. Am. Tobacco

PLC, 371 N.C. 605, 615 (2018) (citation and quotation marks omitted).

13. In deciding the motion, the Court must treat all well-pleaded allegations as

true and view the facts and permissible inferences “in the light most favorable to” the

nonmoving party, Sykes v. Health Network Sols., Inc., 372 N.C. 326, 332 (2019)

(citation and quotation marks omitted), but need not accept as true any “conclusions

of law or unwarranted deductions of fact,” Wray v. City of Greensboro, 370 N.C. 41,

46 (2017) (citation and quotation marks omitted). The Court may also “consider

documents which are the subject of a plaintiff’s complaint and to which the complaint

specifically refers,” without converting the motion to a motion for summary judgment.

Oberlin Cap., L.P. v. Slavin, 147 N.C. App. 52, 60 (2001).

A. Contract Claims

14. The complaint includes a set of interrelated claims for breach of contract,

breach of the implied covenant of good faith and fair dealing, and declaratory

judgment. In a nutshell, Plaintiffs claim that MAACO breached the franchise

agreements and the implied covenant by misappropriating the franchisees’ weekly
advertising fees and withholding annual statements of advertising-related receipts

and disbursements. Plaintiffs seek both damages and declaratory relief based on the

alleged breaches. And they also claim that Driven Brands and Driven Systems are

jointly liable for any breach of the franchise agreements.

15. The elements of a claim for breach of contract are the existence of a valid

contract and a breach of that contract’s terms. See Poor v. Hill, 138 N.C. App. 19, 26

(2000). When these elements are alleged, “it is error to dismiss a breach of contract

claim under Rule 12(b)(6).” Woolard v. Davenport, 166 N.C. App. 129, 134 (2004); see

also Vanguard Pai Lung, LLC v. Moody, 2019 NCBC LEXIS 39, at *11 (N.C. Super.

Ct. June 19, 2019) (“[S]tating a claim for breach of contract is a relatively low bar.”).

16. MAACO concedes that the franchise agreements are valid but disputes

whether the complaint’s allegations, if true, establish a breach. All that is alleged,

according to MAACO, is that it made an unpopular decision to switch from an

in-house advertising agency to an independent agency, which increased

administration costs and reduced the amount spent directly on ads placed on

television, radio, and other media. MAACO insists that this decision was a legitimate

exercise of its broad discretion to administer advertising and marketing programs

under the franchise agreements. On that basis, it contends that the claim for breach

of contract must be dismissed. It goes on to argue that the claims for breach of the

implied covenant and for declaratory judgment must be dismissed as well because

they are bound up with the claim for breach of contract.
17. But MAACO construes the complaint’s allegations too narrowly. Plaintiffs’

beef with MAACO is not simply that it made bad decisions about how to administer

its marketing programs and allocate funds among different types of media. Rather,

Plaintiffs allege that MAACO has misappropriated a portion of the collected fees,

putting the money toward impermissible uses that have nothing at all to do with

advertising or marketing more broadly. As the complaint puts it, “MAACO has

siphoned funds from the advertising funds/marketing fees paid by Plaintiffs for the

improper purpose of cutting . . . administrative and overhead costs or to pay for other

expenses unrelated to and not benefiting the MAACO franchise system.” (Compl.

¶ 42.)

18. MAACO objects that this is a conclusory, unreasonable inference, alleged

only upon information and belief. The Court disagrees. North Carolina remains a

notice pleading jurisdiction, and our Supreme Court has long held that a plaintiff

“may allege facts based on actual knowledge, or upon information and belief.” Myrtle

Apartments, Inc. v. Lumbermen’s Mut. Casualty Co., 258 N.C. 49, 51 (1962). Here,

Plaintiffs have alleged ample factual support for their belief that MAACO has

misused funds. Viewed in the light most favorable to Plaintiffs, the allegations show

that MAACO (1) radically reduced expenditures on ads, (2) refused for several years

to provide contractually required statements of advertising-related receipts and

disbursements, (3) eventually produced data that revealed anomalous transactions

without clarifying how fees collected from franchisees were spent, (4) refused to

explain the anomalies, and (5) assessed spurious charges against franchisees through
a faulty accounting system. (See Compl. ¶¶ 45, 52, 54, 55, 58, 59, 61, 63.) Together,

these allegations support a reasonable inference that MAACO misused advertising

fees collected from its franchisees.

19. Moreover, MAACO does not contest the adequacy of the allegation that it

failed to provide annual statements of receipts and disbursements, as required by the

franchise agreements. This allegation, taken as true, independently supports the

claim for breach of contract.

20. The Court therefore denies the motion to dismiss the claim for breach of

contract against MAACO. And because MAACO offers no independent grounds to

dismiss the claims for breach of the implied covenant and for declaratory judgment,

it follows that these claims survive as well. See, e.g., Cordaro v. Harrington Bank,

FSB, 260 N.C. App. 26, 38 (2018) (“Where a party’s claim for breach of the implied

covenant of good faith and fair dealing is based upon the same acts as its claim for

breach of contract, we treat the former claim as part and parcel of the latter.” (citation

and quotation marks omitted)).

21. This does not mean that Plaintiffs have adequately stated a claim against

Driven Brands and Driven Systems, however. The complaint says next to nothing

about these two defendants, alleging only that they guaranteed MAACO’s contractual

duties and obligations and therefore must be jointly liable for MAACO’s breaches of

the franchise agreements. Such threadbare allegations are insufficient even under a

simple notice-pleading standard. In fact, there is so little in the complaint that the

nature of the claim against Driven Brands and Driven Systems is unclear. The
complaint does not state, for example, that either company breached its guaranty. As

best the Court can tell, Plaintiffs’ theory is that Driven Brands’ and Driven Systems’

guarantees would apply to a monetary judgment if one is entered against MAACO.

That theory, if it is what Plaintiffs intend, is not ripe. There is no judgment yet; the

pleadings haven’t even closed. Given the vague, conclusory quality of the allegations,

the Court dismisses without prejudice these contract-related claims to the extent that

they are asserted against Driven Brands and Driven Systems. See, e.g., Davis v.

Davis Funeral Serv., Inc., 2023 NCBC LEXIS 133, at *5 (N.C. Super. Ct. Oct. 25,

2023) (dismissing claims when the plaintiff did “not allege that [certain defendants]

committed any wrongful acts”); Gateway Mgmt. Servs. v. Carrbridge Berkshire Grp.,

Inc., 2018 NCBC LEXIS 45, at *26 (N.C. Super. Ct. May 9, 2018) (dismissing claim

due to “threadbare allegations”).

B. Section 75-1.1

22. Next, the Court turns to Plaintiffs’ section 75-1.1 claim, which is also based

on allegations that MAACO breached the franchise agreements by misusing or

misappropriating the weekly advertising fees paid by franchisees. Plaintiffs further

allege that MAACO concealed its breach by ignoring the franchisees’ requests for an

accounting of advertising-related expenditures.

23. By statute, “unfair or deceptive acts or practices in or affecting commerce”

are “unlawful.” N.C.G.S. § 75-1.1. Though broad, this language is “not intended to

apply to all wrongs in a business setting.” Dalton v. Camp, 353 N.C. 647, 657 (2001).

Our appellate courts have stressed that “a mere breach of contract, even if
intentional, is not sufficiently unfair or deceptive to sustain an action under N.C.G.S.

§ 75-1.1.” Branch Banking & Trust Co. v. Thompson, 107 N.C. App. 53, 62 (1992). To

state a claim, the plaintiff must also allege “substantial aggravating circumstances

attending the breach.” Eastover Ridge, L.L.C. v. Metric Constructors, Inc., 139 N.C.

App. 360, 368 (2000) (citation and quotation marks omitted).

24. With rare exception, a violation of section 75-1.1 “is unlikely to occur during

the course of contractual performance.” Heron Bay Acquisition, LLC v. United Metal

Finishing, Inc., 245 N.C. App. 378, 383 (2016). “One reason for this is that disputes

concerning the circumstances of the breach are often bound up with one party’s

exercise of perceived rights and remedies under the contract.” Post v. Avita Drugs,

LLC, 2017 NCBC LEXIS 95, at *10–11 (N.C. Super. Ct. Oct. 11, 2017). On that basis,

our courts have held that “[a] party’s threats to terminate, efforts to encourage

another to continue contractual performance while planning to breach, and refusal to

otherwise meet contractual obligations do not rise to the level of aggravating

circumstances.” Id. at *11 (cleaned up); see also Haddock v. Volunteers of Am., Inc.,

2021 NCBC LEXIS 70, at *27 (N.C. Super. Ct. Aug. 25, 2021).

25. MAACO argues that the complaint does not adequately allege the sort of

aggravating circumstances needed to convert an ordinary breach of contract into a

violation of section 75-1.1. The Court agrees.

26. The only aggravating circumstance alleged is MAACO’s failure to provide

annual statements of receipts and disbursements for its advertising programs. But

an express provision of the franchise agreements governs these annual statements.
(See Franchise Agrmt. § 6.1(B).) Even if MAACO withheld information that it was

contractually required to provide, that would be, at most, an intentional breach of the

agreements, not an aggravating circumstance. At no point does the complaint allege

that MAACO destroyed information, provided false or misleading information, or

took any other affirmative, deceptive action to deter the franchisees’ investigation.

Any dispute about the sufficiency of MAACO’s disclosures to its franchisees is simply

a dispute about the parties’ contractual rights and obligations. See, e.g., Maxwell

Foods, LLC v. Smithfield Foods, Inc., 2021 NCBC LEXIS 71, at *27 (N.C. Super. Ct.

Aug. 26, 2021) (“At most, these allegations show that Smithfield failed to disclose its

breach, which is not sufficiently deceptive or egregious to support liability under

section 75-1.1.”); Kerry Bodenhamer Farms, LLC v. Nature’s Pearl Corp., 2017 NCBC

LEXIS 27, at *20 (N.C. Super. Ct. Mar. 27, 2017) (“These allegations concern nothing

more than disputes over the interpretation and performance of the Agreement, which

includes specific provisions governing payment, rejection of unsuitable [goods], and

the requirements for termination.”).

27. Accordingly, the Court grants the motion to dismiss the section 75-1.1 claim.

In its discretion, the Court dismisses this claim with prejudice. See First Fed. Bank

v. Aldridge, 230 N.C. App. 187, 191 (2013) (“The decision to dismiss an action with or

without prejudice is in the discretion of the trial court . . . .”).

C. Accounting

28. Last is Plaintiffs’ accounting claim, in which they seek financial information

regarding what they believe MAACO owes them. “[A]n equitable accounting may be
available when a plaintiff has asserted a valid claim for relief in equity and an

accounting is necessary to compel discovery of information regarding accounts held

exclusively by the defendant.” JT Russell & Sons, Inc. v. Russell, 2024 NCBC LEXIS

37, at *11 (N.C. Super. Ct. Feb. 28, 2024) (citation and quotation marks omitted). “It

is a remedy, not an independent cause of action, and is available only if the plaintiff

first shows that he lacks an adequate remedy at law and alleges facts in the complaint

to that effect.” Elhulu v. Alshalabi, 2021 NCBC LEXIS 44, at *20 (N.C. Super. Ct.

Apr. 29, 2021). The Court therefore grants without prejudice the motion to dismiss

the accounting claim to the extent that it is pleaded as an independent cause of action.

Whether Plaintiffs may be entitled to an accounting as a remedy is a question better

addressed at a later stage.

III.
CONCLUSION

29. For all these reasons, the Court GRANTS in part and DENIES in part

Defendants’ motion to dismiss as follows:

a. The Court GRANTS the motion to dismiss the claims for breach of

contract, breach of the implied covenant of good faith and fair dealing,

and declaratory judgment to the extent that they are asserted against

Driven Brands and Driven Systems. These claims are DISMISSED

without prejudice. The Court DENIES the motion to dismiss the claims

for breach of contract, breach of the implied covenant of good faith and

fair dealing, and declaratory judgment to the extent that they are

asserted against MAACO.
b. The Court GRANTS the motion to dismiss the section 75-1.1 claim.

This claim is DISMISSED with prejudice.

c. The Court GRANTS the motion to dismiss the accounting claim. This

claim is DISMISSED without prejudice to Plaintiffs’ right to seek an

accounting as a remedy, if appropriate, at a later stage.

30. In addition, as previously ordered, (see ECF No. 17), the parties shall

conduct their Business Court Rule 9.1 case management meeting no later than 7 May

2026.

SO ORDERED, this the 22nd day of April, 2026.

/s/ Adam M. Conrad
Adam M. Conrad
Special Superior Court Judge
for Complex Business Cases