Franchisor Cannot Enforce Non-compete Provisions Against Terminated Franchisee
In the business litigation, preliminary injunction case of Executive Home Care Franchising LLC v. Marshall Health Corp. (U.S. Dist. Ct., 12-7-6722),(March 26, 2015) the Plaintiff Franchisor alleged that defendant-franchisee breached the parties’ franchise agreement by unilaterally terminating the agreement and operating an independent home healthcare business serving the same clients using plaintiff’s proprietary information despite the non-compete provisions in the franchise agreement and by failing to pay required royalty fees, plaintiff-franchisor sought to preliminarily enjoin the operation of the competing business. The court denied plaintiff’s application, finding that if failed to show that it would suffer irreparable damage as the result of defendants’ alleged breach of the franchise agreement where defendant represented that it had returned plaintiff’s proprietary materials, was no longer using plaintiff’s trademark, and had taken steps to make clear to its clients that it was no longer affiliated with plaintiff and any other damage could be remedied monetarily. Terminated Franchisee.
Reference: Case & Analysis, New Jersey Law Journal, 220 N.J.L.J. 526 (May 18, 2015)
Filed Under: Franchises; Non-Compete; Preliminary Information
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