Can Annex Brands seek injunctive relief against a franchisee without posting a bond?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
- D. INJUNCTIVE RELIEF. 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
injunction being expressly waived hereby). Any action for such injunctive relief will be submitted to a court or to the American Arbitration Association as provided in Subsection 17.H of this Agreement.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, Annex Brands has the right to seek injunctive relief against a franchisee without being required to post a bond. Specifically, the franchise agreement states that Annex Brands may pursue injunctive relief, with the franchisee's agreement that such relief can be granted without a bond, provided due notice is given to the franchisee.
This means that if a franchisee engages in conduct that threatens irreparable harm to Annex Brands, such as violating non-compete agreements or misusing confidential information, Annex Brands can seek a court order to stop the franchisee's actions immediately. The waiver of the bond requirement can expedite the process, as Annex Brands does not need to set aside funds to cover potential damages to the franchisee if the injunction is later found to be unwarranted.
However, the franchisee's sole remedy if such an injunction is issued is to seek its dissolution if they believe it is unwarranted. The franchisee expressly waives any claims for damages resulting from the wrongful issuance of the injunction. This arrangement favors Annex Brands, as it reduces the financial risk associated with seeking injunctive relief, while the franchisee bears the risk of potential losses if an injunction is wrongly issued against them.