Franchisee seeks split from Million Air stable

 - July 30, 2008, 6:20 AM

A battle is brewing between the Million Air FBO franchising company and one of its more prominent franchisees, a group of seven Million Air FBOs owned by various companies led by Ken Allison. The FBOs, called “Jason III Aviation et al” in the lawsuits, include Million Airs in Cincinnati and Columbus, Ohio; New Orleans and Lafayette, La.; Chicago; Asheville, N.C.; and Charleston, S.C.

Million Air Interlink (MAI), the franchising company based in Houston, filed suit against Allison’s FBOs in April, claiming that they “have taken steps to stop making payments required under the franchise agreements. Defendants are also terminating, or attempting to terminate, the franchise agreements and their obligations as franchisees without the contractual right to do so. Under the agreements, defendants are obligated to participate in an insurance program designated for the benefit of the franchisor and all the franchisees. However, defendants have terminated their participation in the insurance program in breach of their contractual obligations. Furthermore… defendants are also executing a plan
to compete with MAI in breach of the franchise agreements.” MAI is seeking payment for damages exceeding $5 million plus payment for other costs, such as
legal expenses.

Allison’s FBO network responded with its own lawsuit, filed June 19, “for declaratory judgment and breach of contract.” The lawsuit claims that franchise agreements for the FBOs in Cincinnati, Columbus, Chicago Midway and New Orleans have “expired, been terminated or that the franchisees are entitled to terminate their franchise agreements,” and that agreements for Asheville, Charleston and Lafayette were never executed and that material terms had not been agreed on. The Jason III lawsuit also accuses MAI of “diversion of promotional funds and the dilution of the franchise brand resulting from unstable and deteriorating financial condition of the franchisor.”

No one from either Million Air Interlink or Allison’s FBO network would comment on the lawsuits. The next step is a joint plan for the conduct of the litigation, which is due to be turned in to the court clerk on or before September 19.