Under what circumstances can Checkersrallys seek injunctive relief in court instead of arbitration?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
18.04 Injunctive Relief. We, as an alternative or supplement to arbitration pursuant to Section 18.05, may obtain in any court of competent jurisdiction any injunctive relief, including temporary restraining orders and preliminary injunctions, against conduct or threatened conduct for which no adequate remedy at law may be available or which may cause us irreparable harm. We may seek and obtain such injunctive relief, without bond, but upon notice as required under applicable rules, in addition to such further and other relief as may be available at equity or law, and your sole remedy in the event of the entry of such injunction, shall be its dissolution, if warranted, upon hearing duly had (all claims for damages by reason of the wrongful issuance of any such injunction being expressly waived hereby). You and each of your Owners acknowledge that any violation of Section 7, 13.02(l), 16.02 or 16.03 would result in irreparable injury to us for which no adequate remedy at law may be available. Accordingly, you and each of your Owners consent and agree to the issuance of an injunction prohibiting any conduct in violation of any of those sections and agrees that the existence of any claim you or any of your Owners may have against us, whether or not arising from this Agreement, shall not constitute a defense to the enforcement of any of those Sections.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, Checkersrallys, as an alternative to arbitration, can pursue injunctive relief in any court with jurisdiction against conduct or threatened conduct that lacks an adequate remedy at law or may cause irreparable harm. Injunctive relief includes temporary restraining orders and preliminary injunctions. Checkersrallys can seek this relief without posting a bond, but must provide notice as required by applicable rules. If an injunction is issued, the franchisee's sole recourse is to seek its dissolution if warranted. Franchisees waive any claims for damages resulting from a wrongfully issued injunction.
The agreement stipulates that any violation of Sections 7, 13.02(l), 16.02, or 16.03 would cause irreparable injury to Checkersrallys, for which monetary damages would not be sufficient. These sections likely pertain to critical aspects of the franchise agreement, such as protection of trade secrets, brand standards, or non-compete obligations.
Therefore, franchisees and their owners consent to injunctions prohibiting conduct that violates these sections. The existence of any claim the franchisee may have against Checkersrallys does not serve as a defense against the enforcement of these sections through injunctive relief. This clause emphasizes Checkersrallys's ability to swiftly halt actions that could harm the brand, even if the franchisee has other grievances.