What legal recourse does Chicken Guy have if a franchisee violates the covenant not to sue?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Potential Franchisee understands that any violation of this Agreement will cause Chicken Guy immediate and irreparable harm which money damages cannot adequately remedy. Therefore, upon any actual or impending violation of this Agreement, Potential Franchisee hereby consents to issuance by the federal or state court having jurisdiction where Chicken Guy's principal offices are located or, at Chicken Guy's election, any other court that may, assume jurisdiction, of any restraining order, preliminary and/or permanent injunction, without bond, restraining or enjoining such violation by Potential Franchisee or any entity or person acting in concert with Potential Franchisee. Potential Franchisee understands that such orders are additional to and do not limit the availability of any other remedy.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Chicken Guy has the right to seek injunctive relief if a potential franchisee violates the agreement. Specifically, Chicken Guy can pursue a restraining order, preliminary injunction, or permanent injunction from a federal or state court with jurisdiction in the location of Chicken Guy's principal offices. Chicken Guy can also elect to pursue these actions in any other court that may assume jurisdiction. This injunctive relief can be obtained without posting a bond.
According to the FDD, these injunctive orders are in addition to, and do not limit, any other remedies available to Chicken Guy. This means that Chicken Guy can pursue other legal avenues, such as monetary damages, in addition to seeking an injunction. The potential franchisee consents to the issuance of these orders, acknowledging that a violation of the agreement would cause immediate and irreparable harm to Chicken Guy that money damages alone cannot adequately address.
This provision is designed to protect Chicken Guy's confidential information and business interests by preventing potential franchisees from misusing the information they receive during the evaluation process. The ability to quickly obtain injunctive relief is a powerful tool for Chicken Guy to stop any unauthorized use or disclosure of its confidential information, ensuring that its competitive advantage is maintained. This is a common practice in franchising, as franchisors need to protect their trade secrets and business methods.