Does Carvel need to show actual damage to obtain an injunction for breach of the non-compete agreement?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to any other relief available at law or equity, we will have the right to obtain restraining orders or temporary or permanent injunctions to: (i) enforce, among other matters, the provisions of this Agreement related to the System; (ii) enforce your obligations on termination or expiration of this Agreement; and (iii) prohibit any act or omission by you or your employees that is a violation of applicable Law or that threatens the Intellectual Property.
- 19.2 Cumulative Rights and Remedies.
Except as otherwise stated in this Agreement, no right or remedy that the parties have under this Agreement is exclusive of any other right or remedy under this Agreement or under applicable law.
Each and every such remedy will be in addition to, and not in limitation of or substitution for, every other remedy available at law or in equity or by statute or otherwise.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, Carvel does not need to show actual damage to obtain an injunction for breach of the non-compete agreement. Carvel retains the right to seek restraining orders or temporary/permanent injunctions to enforce the franchise agreement provisions related to the system, franchisee obligations upon termination/expiration, and to prevent actions violating applicable laws or threatening intellectual property. This right is in addition to any other legal or equitable remedies available to Carvel.
This means that Carvel can seek court intervention to stop a franchisee from violating the terms of the franchise agreement, particularly concerning non-compete clauses, without necessarily proving that it has already suffered financial harm. This ability to obtain injunctive relief is a significant advantage for Carvel, as it allows them to quickly address potential breaches that could harm the brand or its intellectual property.
For a prospective Carvel franchisee, this clause highlights the importance of understanding and adhering to the franchise agreement, especially the non-compete provisions. Violating these terms could lead to immediate legal action, including injunctions that could halt business operations. While arbitration is typically required for disputes, Carvel can bypass this process to seek immediate injunctive relief in certain situations, emphasizing the seriousness with which Carvel views potential breaches of contract and intellectual property rights.
It's important to note that while Carvel can seek injunctive relief, the franchisee also has rights and remedies available under the law. The agreement specifies that no right or remedy is exclusive, and all remedies are in addition to those available at law or in equity. This suggests that franchisees also have avenues to pursue legal action if they believe Carvel is acting unfairly or in violation of the agreement.