What is the franchisee's sole remedy if Annex Brands obtains an injunction against them?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
Nothing contained in this Agreement will bar Franchisor's or Franchisee's right to obtain injunctive relief against threatened conduct that will cause it irreparable loss or damages, under customary equity rules, including applicable rules for obtaining restraining orders and preliminary injunctions. Franchisee agrees that Franchisor may have such injunctive relief, without bond, but upon due notice, in addition to such further and other relief as may be available at equity or law, and the sole remedy of Franchisee in the event of the entry of such injunction will be the dissolution of such injunction, if warranted, upon hearing duly had (all claims for damages by reason of the wrongful issuance of any such
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, if Annex Brands obtains an injunction against a franchisee, the franchisee's sole remedy is to seek the dissolution of that injunction. The franchisee expressly waives any claims for damages resulting from the injunction's issuance. This means that if a court orders an injunction against the franchisee, the franchisee's only recourse is to attempt to have the injunction lifted; they cannot sue Annex Brands for any financial losses incurred because of the injunction, even if it was wrongfully issued.
This clause significantly limits the franchisee's legal options and potential compensation in the event of an injunction. While injunctions are intended to prevent irreparable harm, they can still cause financial strain and business disruption. The franchisee bears the risk of these potential losses without the ability to seek damages from Annex Brands, even if the injunction is later found to be unwarranted.
This type of clause is not uncommon in franchise agreements, as franchisors often seek to protect their brand standards, trade secrets, and customer relationships. However, prospective franchisees should carefully consider the implications of waiving their right to claim damages, as it could leave them vulnerable to financial losses if an injunction is improperly issued. Franchisees should consult with a legal professional to fully understand their rights and obligations under the franchise agreement.