United States District Court, N.D. Texas, Dallas Division
MEMORANDUM OPINION ORDER
J. BOYL UNITED STATES DISTRICT JUDGE
the Court is Plaintiff BL Restaurant Franchises LLC's
(Bar Louie) Amended Motion for Temporary Restraining Order
and Preliminary Injunction. Doc. 14. For the reasons that
follow, the Court DENIES the motion.
Louie, franchisor of the Bar Louie restaurant system, filed
suit against Defendants, three franchisees and the entities
they control, who operate or have operated three Bar Louie
restaurants, alleging that they breached various provisions
in their Unit Franchise Agreements (UFA). Doc. 1, Compl.,
¶ 1. Two days after filing suit, Bar Louie filed a
motion for a temporary restraining order (TRO) and
preliminary injunction seeking to enforce certain terms of
the UFAs for the defendants' Ridgedale and Uptown
Locations. Doc. 6, Mot. for TRO. The parties resolved the
claims against the Ridgedale Location out of court, so Bar
Louie filed the amended motion presently before the Court.
Doc. 14, Am. Mot. for TRO. In Bar Louie's amended motion,
it seeks an injunction only against the Uptown Location to
require the defendants to comply with the pre-termination
procedures in the restaurant's UFA before closing the
restaurant. Doc. 14, Am. Mot. for TRO, 2.
15, 2018, before Bar Louie's motion was ripe, the Uptown
Location closed. Doc. 22, Pl.'s App., 1. Bar Louie
contends that the closure does not moot its motion because
“‘where a defendant with notice in an injunction
proceeding completes the acts sought to be enjoined the court
may by mandatory injunction restore the status
quo.'” Id. (quoting Porter v.
Lee, 328 U.S. 246, 251 (1946); see also Boerschig v.
Trans-Pecos Pipeline, 872 F.3d 701, 704 (5th Cir.
2017)). The Court agrees. And after the Uptown Location
closed the defendants filed a response brief, Bar Louie
replied, and the Court held a hearing on Bar Louie's
motion. Thus, Bar Louie's motion is ripe for review.
relief is an extraordinary and drastic remedy, and should
only be granted when the movant has clearly carried the
burden of persuasion.” Anderson v. Jackson,
556 F.3d 351, 360 (5th Cir. 2009). To obtain a preliminary
injunction, a plaintiff must show “(1) a substantial
likelihood of success on the merits; (2) a substantial threat
that it will suffer irreparable injury absent the injunction;
(3) that the threatened injury outweighs any harm the
injunction might cause the defendants; and (4) that the
injunction will not impair the public interest.”
Enrique Bernat F., S.A. v. Guadalajara, Inc., 210
F.3d 439, 442 (5th Cir. 2000). “A temporary restraining
order . . . is simply a highly accelerated and temporary form
of preliminary injunctive relief, which requires that party
seeking such relief to establish the same four elements for
obtaining a preliminary injunction.” BNSF Ry. Co.
v. Panhandle N. R.R. LLC, 4:16-CV-1061-O, 2016 WL
10827703, at *1 (N.D. Tex. Dec. 30, 2016) (internal
Louie and the defendants executed the Uptown Location UFA on
October 21, 2011. Doc. 7, Br. in Supp. of Mot. for TRO, 7.
The term expires on October 21, 2021. Id. But the
Uptown Location informed Bar Louie on March 26, 2018 that it
intended to close the restaurant. Id. Section 19.3
of the UFA provides that “[f]ranchisee may not
terminate the Agreement prior to the expiration of its term,
except through arbitration as set forth herein, based upon a
material breach of the Agreement by the Franchisor.”
Id. at 4. The franchisee must provide the franchisor
with written notice of its claim within one year of when it
believed the franchisor materially breached the UFA and it
must allow the franchisor sixty days to cure. Id.
Bar Louie claims the Uptown Location did not follow this
procedure before closing its restaurant and that it is
entitled to injunctive relief requiring the Uptown Location
to reopen and comply with § 19.3. Id. at 8;
Doc. 22, Pl.'s App., 1.
Section 22.1 of the UFA
parties agreed in the UFA that Bar Louie has a right to an
injunction in particular circumstances regardless of whether
Bar Louie has shown the four elements required to establish a
right to injunctive relief. Section 22.1 of the UFA provides
Franchisee recognizes the unique value and secondary meaning
attached to the System, the Proprietary Marks, standards of
operation and Confidential Information (collectively,
“Proprietary Property”), and Franchisee agrees
that any non-compliance with the terms of this Agreement or
any unauthorized or improper use of the Proprietary Property
will cause irreparable damage to Franchisor and its
franchisees. Franchisee therefore agrees that if it should
engage in any such unauthorized or improper use of the
Proprietary Property, either during or after the Term,
Franchisor shall be entitled to permanent and temporary
injunctive relief, without bond, from any court of competent
jurisdiction, in addition to any other remedies to which
Franchisor may be entitled by law or at equity.
Doc. 1-4, Ex. 3, § 22.1. Bar Louie believes this
provision applies to its claims against the Uptown Location.
See Doc. 7, Br. in Supp. of Mot. for TRO, 21 (using
the provision to argue the Court should not require it to
post a bond). But the Court disagrees. Section 22.1 provides
that Bar Louie is entitled to an injunction if a franchisee
engages in “unauthorized or improper use of the
Proprietary Property.” Doc. 1-4, Ex. 3, § 22.1.
“Proprietary Property” is defined as “the
System, the Proprietary Marks, standards of operation and
confidential information.” Id. “The
System” is defined as Bar Louie trade dress,
trademarks, service marks, copyrights, “confidential
information, confidential materials, operating systems and
methods for merchandising food and beverage products and for
operating the Bar Louie Restaurant.” Id.
§ 1.1.2. Bar Louie's claims against the Uptown
Location do not relate to Bar Louie's Proprietary
Property; Bar Louie requests an injunction only to require
the Uptown Location to give notice of Bar Louie's alleged
material breach of the UFA and an opportunity to cure if the
Uptown Location seeks early termination of the UFA. Thus,
because Bar Louie's claims do not fall under § 22.1,
the UFA does not entitle Bar Louie to an injunction.
Louie also claims it is entitled to an injunction because it
has shown it is likely to succeed on the merits, irreparable
harm, that its injury outweighs the harm to the defendants,
and that an injunction is in the public interest. Doc. 7, Br.
in Supp. of Mot. ...