If Checkersrallys obtains an injunction against a franchisee, what is the franchisee's sole remedy?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
I acknowledge that violation of the covenants not to compete contained in this Agreement would result in immediate and irreparable injury to Franchisor and Franchisee, for which no adequate remedy at law will be available. Accordingly, I hereby consent to the entry of an injunction procured by Franchisor or Franchisee (or both), in any appropriate jurisdiction and venue (notwithstanding other references to resolution of actions exclusively in Franchisor's home prohibiting any conduct by me in violation of the terms of those covenants not to compete and/or restrictions on the use of Confidential Information under this Agreement. I expressly agree that it may conclusively be presumed in any legal action that any violation of the terms of these covenants not to compete was accomplished by and through my unlawful utilization of Franchisor's Confidential Information. Further, I expressly agree that any claims I may have against Franchisor will not constitute a defense to Franchisor's enforcement of the covenants not to compete under this Agreement. I further agree to pay all costs and expenses (including reasonable attorneys' and experts' fees) incurred by Franchisor in connection with the enforcement of those covenants not to compete set forth in this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to the 2025 Checkersrallys Franchise Disclosure Document, franchisees acknowledge that violating the non-compete covenants would cause immediate and irreparable harm to Checkersrallys, for which monetary compensation would not be adequate. Therefore, franchisees consent to an injunction issued by a court to stop any conduct violating the non-compete terms or the restrictions on using confidential information.
This means that if a Checkersrallys franchisee violates the non-compete agreement, Checkersrallys can seek a court order (injunction) to immediately stop the franchisee's actions. The franchisee agrees that financial compensation alone would not be sufficient to cover the damages to Checkersrallys. The franchisee also agrees that any claims they may have against Checkersrallys will not prevent Checkersrallys from enforcing the non-compete covenants.
This clause is significant because it limits a franchisee's options if they breach the non-compete agreement. They cannot argue that they should be allowed to continue the prohibited activity in exchange for paying damages. The franchisee also agrees to cover Checkersrallys's legal costs (including attorney and expert fees) for enforcing the non-compete agreement. This could create a substantial financial burden for a franchisee found in violation.