Does the developer waive claims for damages from wrongful injunctions by Floyds 99?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
| | 4. | Section 13.5 is deleted and the following is inserted in its place: | | | | 13.5 waived by the Developer. | Injunctive Relief. The Franchisor and the Developer shall each have the right in the proper case to seek injunctive relief from a court of competent jurisdiction. The Developer agrees that the Franchisor may seek such injunctive relief, without posting a bond or bonds totaling more than $500, but upon due notice, and the Developer's sole remedy in the event of the entry of such injunctive relief shall be the dissolution of such injunctive relief, if warranted, upon hearing duly had; provided, however, that all claims for damages by reason of the wrongful issuance of any such injunction are hereby expressly |
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the developer (franchisee) expressly waives claims for damages resulting from the wrongful issuance of an injunction. However, this waiver is conditional. The franchisee's sole remedy is to seek the dissolution of the injunction if it's warranted, upon a duly held hearing. Floyds 99 can seek injunctive relief without posting a bond exceeding $500, provided they give due notice.
This means that if Floyds 99 obtains an injunction against a franchisee, and that injunction is later determined to be wrongful, the franchisee cannot sue Floyds 99 for damages incurred as a result of the injunction. The franchisee's recourse is limited to challenging the injunction itself and seeking its removal.
The $500 bond limit is relatively low. In many jurisdictions, courts require a bond to protect the party being enjoined from losses if the injunction is later found to be unjustified. The franchisee should consider the potential financial impact of an injunction, even a temporary one, and whether the limited bond adequately covers potential losses.
This clause significantly limits the franchisee's legal options and potential compensation in the event of a wrongful injunction. Prospective franchisees should carefully consider this provision and seek legal counsel to understand the full implications before signing the Development Agreement.