In a significant development in the realm of franchisee law, a Minnesota federal court recently denied cookie dough franchisor Cookie Dough Bliss Franchising’s bid for a temporary restraining order and preliminary injunction against a former Minnesota franchisee and its owners. This represents a noteworthy instance of a non-compete clause, often embedded in franchise agreements, encountering an obstacle in court.
Courtesy of Lewitt Hackman, a legal firm that specializes in franchise and business litigation, the case’s depth is as such.
Franchising businesses tend to include non-compete clauses in their agreements with franchisees for the protection of the brand and its proprietary information. These clauses aim to prevent franchisees from taking part in a similar business after their agreement has ended, thus creating a potential threat to the franchisor.
However, the enforceability of such non-compete clauses can vary based on the jurisdiction. As seen in this most recent court decision in Minnesota, certain legal bodies may deny a franchisor’s motion for an injunction intended to enforce a non-compete clause against former franchisees.
In conclusion, this recent decision underscores the complexities surrounding franchise law, in particular the enforceability of non-compete agreements. Legal professionals working within franchising or interested in non-compete clauses should take note of this development and other similar cases that could impact their future work.