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The Franchise Memorandum

The Franchise Memorandum

Posts in Post-Termination Injunctions: Trademarks.

A federal court in Tennessee has held a franchisee in contempt for its failure to deidentify its restaurant after entry of a temporary restraining order and consent permanent injunction.

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A federal court in Tennessee granted a franchisor’s request for a temporary restraining order, preventing its former franchisee from operating a competing business at its formerly franchised locations and from infringing the franchisor’s trade dress, trademarks, and intellectual property. I Love Juice Bar Franchising, LLC v. ILJB Charlotte Juice, LLC, 2019 WL 6050283 (M.D. Tenn. Nov. 15, 2019). ILJB was a franchisee of Juice Bar with two locations in Charlotte, North Carolina. Upon ILJB’s request for early termination, Juice Bar submitted a termination offer to ILJB ...

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A federal court in Alabama recently granted a preliminary injunction ordering a former IHOP franchisee to deidentify and debrand its restaurants. IHOP Rests LLC v. Moeini, 2018 WL 762343 (S.D. Ala. Feb. 7, 2018). IHOP had terminated three franchise agreements with the franchisee, who had failed to operate the restaurants in compliance with IHOP’s standard procedures, polices, and regulations. Following the termination, Moeini continued operating the restaurants as IHOP franchised businesses, so IHOP sued and moved for a preliminary injunction seeking to enforce ...

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A federal court in California granted a franchisor's motion to preliminarily enjoin a former franchisee from continuing to use its trademarks following the franchisee's termination for failure to pay royalties and advertising fees. IHOP Franchising, LLC v. Hameed, 2015 U.S. Dist. LEXIS 12021 (E.D. Cal. Feb. 2, 2015). After IHOP and its affiliates terminated the franchise agreement, Hameed continued to operate his restaurant using IHOP's trademarks. IHOP then filed suit for breach of contract, trademark infringement, and unfair competition, and moved to enforce Hameed's ...

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A federal district court in Wisconsin has granted a franchisor’s motion for a preliminary injunction against a former franchisee who continued to use a variation of the franchisor’s trademark after entering into a Franchise Termination Agreement. Dent Doctor, Inc. v. Dent Clinic, Inc., 2014 WL 7139831 (E.D. Wis. Dec. 12, 2014). Dent Clinic operated a Dent Doctor franchise from 1993 to 2012 until the parties entered into the termination agreement. The agreement required Dent Clinic to cease using the trademark DENT DOCTOR. In response, it replaced the mark DENT DOCTOR with DENT ...

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A federal district court in Massachusetts held that a franchisor was entitled to an injunction restraining its former franchisee in Puerto Rico from using its trademarks after termination. Dunkin' Donuts Franchised Rests. LLC v. Wometco Donas Inc., 2014 U.S. Dist. LEXIS 127918 (D. Mass. Sept. 11, 2014). Gray Plant Mooty represents the franchisor in this case. Dunkin' terminated the parties' franchise agreement based on Wometco's failure to pay royalties and renewal fees and brought suit against Wometco and its affiliate, the guarantor of the agreement, to enforce the ...

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In You Fit, Inc. v. Pleasanton Fitness, LLC, 2013 U.S. Dist. LEXIS 18106 (M.D. Fla. Feb. 8, 2013), a federal court in Florida granted the motion of You Fit, a franchisor, for a preliminary injunction under trademark law. The court found that the defendant former franchisee’s operation of FIT U health clubs was confusingly similar to the franchisor’s YOUFIT health clubs.

The court discussed the seven factors used to evaluate whether there was a likelihood of confusion, focusing primarily on the two most important—the strength of the plaintiff’s mark and any actual confusion ...

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The United States District Court for the Eastern District of California granted a franchisor’s motion for a preliminary injunction on its trademark infringement claim against a holdover franchisee after finding that it demonstrated all of the elements required for injunctive relief. 7-Eleven, Inc. v. TSC Lending Grp., Inc., 2012 U.S. Dist. LEXIS 166691 (E.D. Cal. Nov. 20, 2012). The franchisee was terminated for failing to maintain a net worth of $15,000, but it continued operating under 7-Eleven’s marks. The court held that 7-Eleven had demonstrated a likelihood of success ...

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In Anago Franchising, Inc. v. IMTN, Inc., 2012 U.S. App. LEXIS 8120 (7th Cir. Mar. 29, 2012), Anago Franchising terminated one of its subfranchisors, IMTN. After termination, Anago discovered that IMTN had sent a letter to many of its customers advising them that it would no longer be operating under the franchisor’s name, but instead would operate under a competing trademark and software system. Anago commenced an action, claiming that IMTN’s use of its trademarks in the letter would cause confusion regarding IMTN’s continued affiliation with Anago. Specifically, Anago ...

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In Country Inns & Suites By Carlson, Inc. v. Camarillo Hospitality, LLC, Case No. SACV 11- 1802 AG (ANx) (N.D. Cal. Jan. 9, 2012), a case handled by Gray Plant Mooty, the franchisor filed a motion for preliminary injunction seeking to prevent the defendant from using and/or infringing upon its registered trademarks in promoting its new hotel as the “Camarillo Country Inn & Suites.” The hotel had been operated as a Country Inn & Suites By Carlson system hotel for over twelve years, but the former franchisee had recently been terminated and the property repossessed by its lender. In ...

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In KFC Corp. v. JRN, Inc., 2012 U.S. Dist. LEXIS 6127 (W.D. Ky. Jan. 19, 2012), a federal district court denied a franchisor’s motion for a preliminary injunction seeking to prevent the continued operation of multiple franchises. KFC had terminated ten franchises owned by JRN, Inc., one of its largest franchisees, for not meeting a remodel schedule agreed to after its franchise agreements had gone into effect. KFC sued to enforce the terminations, taking the position that a breach of these ancillary agreements also constituted a breach of the underlying franchise agreements. The ...

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Buffalo Wild Wings (BWW) recently prevailed on its motion for a preliminary injunction to enjoin three franchisees from continuing to use BWW’s trademarks after the termination of their franchise agreements. Buffalo Wild Wings Int’l, Inc. v. Grand Canyon Equity Partners LLC, 2011 U.S. Dist. LEXIS 141921 (D. Minn. Dec. 9, 2011). BWW terminated the franchisees for nonpayment, but allowed them to find a purchaser pursuant to a Limited Reinstatement Agreement. The Agreement would automatically expire and the franchisees would be required to immediately cease using the marks if ...

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In an unusual split decision, a federal district court in Georgia ruled last week that a former franchisee was not in contempt of an injunction order against use of the franchisor’s trademarks. AFC Enterprises, Inc. v. The Restaurant Group LLC, 2010 U.S. Dist. LEXIS 117240 (N.D. Ga. Nov. 3, 2010). The franchisee had simply closed the store in face of an order not to “operate” it and not to “use” the POPEYES® marks of the franchisor. The signs apparently stayed up, and the franchisor moved for contempt. The court held, however, that its order not to “use” the marks meant only ...

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In Krispy Kreme Doughnut Corp. v. Satellite Donuts, L.L.C., 2010 U.S. Dist. LEXIS 73913 (S.D.N.Y. Jul. 22, 2010), a franchisor obtained a preliminary injunction against its former franchisee. Krispy Kreme had terminated the franchise agreement after Satellite failed to pay royalties and other amounts, but Satellite continued to operate as a Krispy Kreme store after termination. Krispy Kreme brought suit seeking a temporary restraining order and a preliminary injunction to stop Satellite from using its trademarks and proprietary materials.

In granting the franchisor’s ...

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In Dunkin’ Donuts Franchised Restaurants, LLC, et al. v. Fatima & Ali, Inc., et al., Case No. 09-60793-WPD (S.D. Fla. Aug. 14, 2009), a Florida federal court last month entered a preliminary injunction prohibiting the franchisees from infringing on Dunkin’ Donuts’ trademarks after termination for failure to pay franchise and advertising fees.

The court found that Dunkin’ Donuts demonstrated a likelihood of success on the merits of its claims. The franchisees had argued that because Dunkin’ Donuts sought a preliminary injunction to cease use of its trademarks, the ...

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A Texas federal court recently issued a preliminary injunction preventing the defendants/franchisees from continuing to use plaintiff TGI Friday’s Inc.’s trademarks following the termination of the parties’ franchise agreements. TGI Friday’s Inc. v. Great Northwest Restaurants, Inc. et al., 2009 WL 2568269 (N.D. Tex. Aug. 20, 2009). 

The court held that TGI Friday’s had demonstrated a substantial likelihood that it would prevail on the merits of its termination case because there was no dispute that the franchisees had ceased paying franchise fees and continued to ...

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The Franchise Memorandum is a collection of postings on summaries of recent legal developments of interest to franchisors brought to you by Lathrop GPM LLP. 

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