In Days Inn Worldwide, Inc. v. BFC Management, Inc., 2008 WL 619210 (D.N.J. March 4, 2008), the court awarded the hospitality franchisor treble damages for trademark infringement claims and also awarded full liquidated damages in accordance with the franchise agreement. Even after it was terminated, the franchisee continued to use the franchisor’s trademarks on its exterior signage as well as on the cups, toiletries, and other items in the facility for almost three months. The court held that the franchisee’s unauthorized use of the marks created a likelihood of confusion and awarded treble damages as allowed by federal trademark law for lost gross room revenue during the period of infringement. Further, the court awarded liquidated damages in the full amount as contemplated by the franchise agreement. In evaluating the reasonableness of the liquidated damages clause, the court held that the parties were of comparable bargaining power, and that the parties intended for the franchisor to receive liquidated damages in the event of a breach by the franchisee.
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