Under what conditions is Chicken Guy entitled to injunctive relief against a franchisee?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
- **E.
Injunctive Relief.** Notwithstanding anything to the contrary contained in this Section 31, Franchisee recognizes that its failure to comply with the terms of this Agreement is likely to cause irreparable harm to Chicken Guy, its affiliates and the System.
Therefore, Franchisee agrees that, in the event of a breach or threatened breach of any of the terms of this Agreement by Franchisee, Chicken Guy shall be entitled to injunctive relief (preliminary and permanent) restraining that breach and/or temporary restraining orders and/or to specific performance from a court of competent jurisdiction without showing or proving actual damages and without posting any bond or security; provided, however, that Chicken Guy and Franchisee must contemporaneously submit the disputes for non-binding mediation under Section 31.A. and then for arbitration under Section 31.B. on the merits as provided herein if such disputes cannot be resolved through mediation.
Franchisee acknowledges that a proper case to obtain temporary restraining orders and preliminary or permanent injunctive relief from a court of competent jurisdiction contemporaneously with submitting the disputes to mediation and then to arbitration shall include, but not be limited to, the following: (1) any dispute involving actual or threatened disclosure or misuse of the contents of the Manual or any other confidential information or trade secrets of Chicken Guy; (2) any dispute involving the ownership, validity, use of, or right to use or license the Proprietary Marks; (3) any action by Chicken Guy to enforce post-termination obligations; and (4) any action by Chicken Guy to stop or prevent any threat or danger to public health or safety resulting from the construction, maintenance, or operation of the Franchised Restaurant.
Any equitable remedies sought by Chicken Guy shall be in addition to, and not in lieu of, all remedies and rights that Chicken Guy otherwise may have arising under applicable law or by virtue of any breach of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, Chicken Guy is entitled to injunctive relief against a franchisee if the franchisee breaches or threatens to breach any terms of the Franchise Agreement. Chicken Guy does not need to show or prove actual damages or post a bond or security to obtain this relief. However, Chicken Guy and the franchisee must first submit the dispute for non-binding mediation and then for arbitration if mediation is unsuccessful.
The document specifies certain situations that would warrant temporary restraining orders and preliminary or permanent injunctive relief. These include disputes involving the disclosure or misuse of the Manual or confidential information, issues related to the ownership, validity, or use of the Proprietary Marks, actions to enforce post-termination obligations, and actions to prevent threats to public health or safety related to the restaurant's construction, maintenance, or operation.
This means that if a Chicken Guy franchisee violates the terms of their agreement, particularly concerning confidential information, trademarks, post-termination duties, or public safety, Chicken Guy can seek immediate legal intervention to stop the harmful actions. This is in addition to any other legal remedies Chicken Guy may pursue for the breach of contract. This clause underscores the importance of franchisees adhering strictly to the Franchise Agreement to avoid potential legal action and the risk of injunctive relief.