Injunctions in the Franchising Context: Comparing the Canadian and American Systems

Franchisors often seek injunctions to enforce non-competition and other covenants contained in their franchise agreements, sometimes during but most often after the end of the franchise relationship. A common example is an injunction to enforce a covenant in which the franchisee contracts to not compete in a similar business for a specified period of time and within a specified geographic area. If successful, the moving party-franchisor is granted an injunction forcing the former franchisee to abide by its contractual obligations for the specified time period. Given the time it generally takes to reach trial, the non-competition clause often will expire before the trial occurs. As such, a successful interlocutory injunction motion often will finally decide the issues for the franchisor, rendering the trial moot. Given this reality, parties frequently settle after a successful interlocutory injunction, or the case may be abandoned after an unsuccessful one.