- 9 - by the franchisee, by Mr. Howard's death, or by his failure to materially participate. Covenant Not to Compete The amount paid for the covenant not to compete and the term of the covenant were negotiated separately from the price of the other assets. Prior to negotiating with Mr. Markley, Mr. Howard intuitively calculated the value of Mr. Markley's agreeing not to compete with petitioner. Mr. Howard projected annual gross profits less variable costs for the Jeep-Eagle dealership at approximately $1,996,000, as follows: New vehicle sales $810,000 Finance and insurance income 351,000 Used vehicle sales 222,750 Parts and service 612,000 1,995,750 Mr. Howard believed that Mr. Markley could take 25 percent of his business if Mr. Markley competed with him. At the time of the transaction, petitioner believed that Mr. Markley was a significant competitive threat because: (1) Mr. Markley had very good connections with the Jeep-Eagle factory personnel; (2) Mr. Markley's name was well known in the Oklahoma City metropolitan area; (3) Mr. Markley was from Oklahoma City and was continuing in the automobile business in Oklahoma City after the sale; (4) Mr. Markley's demonstrated sales ability was very good; (5) Mr. Markley's age and background made him a competitive threat; (6) Mr. Markley had good customer relations in the Oklahoma City metropolitan area; and (7) Mr. Markley had superior knowledge of Chrysler and Jeep-Eagle product lines.Page: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 Next
Last modified: May 25, 2011