A few days ago, the United States District Court for the Northern District of Illinois denied a plaintiff franchisee’s preliminary injunction request, thereby dooming the ‘Halal Guys’ franchisee’s legal attempt to remain in business after it was terminated by its franchisor. As with many other restaurant franchise terminations, the franchisee in this case was repeatedly defaulted for health and other operational food violations. At the end of the day, the federal court was not persuaded by the franchisee attorney’s focus on an email in which one of the franchisor owners had told the quality inspector to ‘go hard’ on the franchisee when conducting one of the last inspections. As the Court noted, the franchisee had failed to establish its right to the emergency injunction because it failed to individually specifically address, and rebut, under oath, each of the alleged food violations upon which the termination was based. The Court’s analysis of the denial of the emergency relief was exceedingly traditional; however, the decision did appear to contain a small analytical inconsistency when it found both that the plaintiff franchisee had an ‘adequate remedy at law’ [through a damages award in a later trial down the line] and that the franchise brand might not suffer if the Court had chosen to allow the franchisee to continue operating as a branded restaurant.
H Guys Ltd. Liab. Co. v. Halal Guys Franchise, Inc., No. 19-cv-4974, 2019 U.S. Dist. LEXIS 124052 (N.D. Ill. July 25, 2019)
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