Auto Driveaway Franchise Systems, LLC v. Auto Driveaway Richmond LLC

Federal 7th Circuit Court
Civil Court
Case Number: 
No. 18-3402
Decision Date: 
June 28, 2019
Federal District: 
N.D. Ill., E. Div.
Affirmed and remanded

Dist. Ct. did not err in granting plaintiff-franchisor’s request for issuance of preliminary injunction to enjoin defendants-franchisees from operating as franchisees or de facto franchisees of Auto Driveaway and from using any of contested technology, apps or trademarks, where plaintiff alleged that defendants were using same that belonged to it to start up rival business, and where plaintiff sought to enforce non-compete clause in franchise agreement. Dist. Ct. found that plaintiff was likely to succeed on merits of enforceability of restrictive covenants in franchise agreement, as well as establishing existence of implied-in-fact contract and breach of franchise agreement. However, on remand, Dist. Ct. must revisit requirement that plaintiff pay only $10,000 bond to protect defendants against any harm caused during pendency of preliminary injunction, since said amount did not approximate defendants’ potential and/or predictable losses arising out of being banned from conducting business.