In the event of an injunction against a Casiola franchisee for breach of restrictive covenants, what is the franchisee's sole remedy?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
ities, narrowing the definition of a Competitive Business, shortening the duration of the Post-Term Restricted Period, reducing the geographic scope of the Restricted Territory and/or reducing the scope of any other covenant imposed upon Franchisee under this Article 6 to ensure that the terms and covenants are enforceable under applicable law.
6.G. BREACH OF RESTRICTIVE COVENANTS AND OBLIGATIONS
Franchisee agrees that Franchisee's failure and/or Franchisee's Owner(s) failure to comply with the restrictive covenants and obligations set forth in this Article 6 will cause irreparable harm to Franchisor and/or other Casiola Business franchisees for which there is no adequate remedy at law. Franchisee agrees that any violation of these Article 6 covenants and obligations by either Franchisee and/or any Owner(s) will entitle Franchisor to injunctive relief. Franchisee agrees that Franchisor may apply for 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 a hearing duly held (all claims for damages by reason of the wrongful issuance of any such injunction being expressly waived hereby). If
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to Casiola's 2024 Franchise Disclosure Document, if a franchisee breaches the restrictive covenants and an injunction is entered against them, their sole remedy is the dissolution of the injunction, if warranted, following a duly held hearing. The franchisee also expressly waives all claims for damages resulting from the wrongful issuance of such an injunction.
Casiola emphasizes that failure to comply with restrictive covenants causes irreparable harm for which monetary compensation is inadequate. Therefore, Casiola is entitled to seek injunctive relief against a franchisee to prevent further breaches.
If a court requires Casiola to post a bond despite the agreement stating it is not required, the maximum bond amount is $1,000. However, this does not limit Casiola's ability to pursue other remedies, such as specific performance or monetary damages, in addition to injunctive relief.