Enjoining Franchise Operations In the State of New Jersey: Instructive Points for Franchisors
Franchisors (or franchisees dealing with termination issues) must establish that (a) the franchisor will suffer immediate and irreperable harm if the injunction is not issued, (b) that the franchisors claim is based on established law, (c) that there is a substantial likelihood that the franchisor will prevail on its legal claims, and (d) the threatened injury to the franchisor outweighs any harm to the franchisee resulting from the injunction.
Evidence is Critical. Applications for injunctions typically occur at the inception of franchise litigation. When filing these applications - Although the litigation has just started - it is critical that the franchisor submit business records and other forms of tangible evidence demonstrating the franchisees wrongful acts. As demonstrated in Ispahani v. Allied Domecq Retailing USA and Dunkin Douts, Inc. (320 N.J. Super 494) relying on officer affidavits may not be enough.
When seeking injunctive relief franchisors must not let their guard down and should resist the temptation of just relying on an officer affidavits. In Ispahani v. Allied Domecq Retailing, USA, the franchisr failed to submit to the court independent business records - i.e. royalty reports, purchase reports, etc... - and the court pointed to this evidentiary error as a basis for denying injunctive relief.
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