RE/MAX New England and two of its former franchisees are facing off in U.S. District Court in Boston next month in a David v. Goliath case that could have big implications for franchisees.

Former RE/MAX franchisees Andrew Armata and Stacey Alcorn allege RE/MAX New England hindered their growth and structured franchise agreements to make it virtually impossible for owners of multiple offices, like themselves, to leave the franchise.

Pamela Alexander, CEO of RE/MAX NE’s parent company RE/MAX Integra, denies the charges and alleges Armata and Stacey breached their franchisee agreements.

By 2013, Alcorn and Armata had 13 offices, 260 agents, and the feeling that RE/MAX NE was actively trying to limit their growth. Armata said RE/MAX first removed protective buffers around existing offices and then allowed new offices to open, sometimes in a town that already had a RE/MAX office.

Alexander said the company supported Alcorn and Armata, and provided them with a variety of growth opportunities along the way.

“In their time with RE/MAX we encouraged their growth,” Alexander said. “They didn’t have a deep real estate background. We provided them with tools and they built their organization around that framework.”

On April 14, 2014, Alcorn and Armata severed their relationship with RE/MAX and opened LAER Realty. In July of that year, RE/MAX NE sought and was denied a temporary restraining order that would have stopped LAER Realty from doing business.

Armata and Alcorn are the first to challenge the RE/MAX NE post-term, non-compete clause in court.

“That is true,” Alexander said. “We don’t have a lot of legal issues with our franchisees. We’re very fair and open and our system is excellent.”

She characterized the suit as an unfortunate part of running a global franchise with more than 34,000 agents.

Read the full story in Monday’s issue of Banker & Tradesman.