United States District Court, M.D. Tennessee, Nashville Division
MEMORANDUM OPINION AND ORDER
RICHARDSON UNITED STATES DISTRICT JUDGE
before the Court is Plaintiff's I Love Juice Bar
Franchising, LLC's Motion for Temporary Restraining Order
and Preliminary Injunction (the “Motion”), filed
on November 4, 2019. (Doc. No. 4). Defendants ILJB Charlotte
Juice, LLC (“ILJB Charlotte”) and Brian MacIntosh
have responded (Doc. No. 10, the “Response”); and
Plaintiff has replied (Doc. No. 14, the “Reply”).
reasons discussed below, the Motion will be granted (if and
when Plaintiff posts security as required by the Court) as to
Plaintiff's request for a Temporary Restraining Order.
The scope of the Temporary Restraining Order is outlined
below. As to Plaintiff's request for a preliminary
injunction, a timely hearing will be scheduled.
I Love Juice Bar Franchising, LLC (“Juice Bar”),
is a Tennessee limited liability company engaged in the
business of franchising independent businesspersons to
operate I Love Juice Bar franchised businesses throughout the
United States. I Love Juice Bar franchisees are licensed to
use the trade names, service marks, and trademarks of I Love
Juice Bar and to operate under the I Love Juice Bar system,
which involves the production, merchandising, and sale of
blended-to-order fruit and vegetable juices and smoothies and
related products. I Love Juice Bar Holdings, LLC (“ILJB
Holdings”) is the owner of the trademarks, service
marks, logos, emblems, trade dress and trade name “I
Love Juice Bar, ” and related marks. Currently, there
are approximately forty I Love Juice Bar shops across the
southern and midwestern United States.
about May 2017, Juice Bar and ILJB Charlotte entered into two
franchise agreements (“Franchise Agreements”),
which authorized ILJB Charlotte to operate two I Love Juice
Bar franchised businesses in Charlotte North Carolina-one at
each of two different stores. At the time the Franchise
Agreements were executed, Defendant Brian MacIntosh and
Stanley Parrish jointly owned ILJB Charlotte. MacIntosh
personally guaranteed ILJB Charlotte's obligations under
the Franchise Agreements. In 2018, Defendant MacIntosh and
Parrish began negotiations with one another to end their
joint ownership of ILJB Charlotte.
December 2018, Defendants requested an early termination of
the Franchise Agreements. On December 31, 2018, Dedria Ryan,
the former CEO of Juice Bar, sent Defendants an early
termination letter (“Termination Offer”), which
included a provision for a termination fee of $5000 and a
noncompetition provision. According to Defendants, after
sending Defendants the Termination Offer on December 31,
2018, Ryan effectively amended its terms by authorizing the
removal of these two provisions. Notably, Plaintiff disputes
that Ryan ever agreed to amend the terms of the Termination
thereafter, Ryan left her employment with Juice Bar and was
replaced in the CEO position by Molly Murphy. On April 18,
2019, Murphy traveled to Charlotte and met with MacIntosh
regarding his two franchised stores.
around the week of September 9, 2019, Defendants transitioned
to a new Point of Sale System, to which Juice Bar requested
access. Defendants informed Juice Bar that they would give it
access to the new system and the franchised businesses'
sales and royalties data. To date, however, Defendants have
not provided Juice Bar with access to their new Point of Sale
system and/or their sales and royalties data.
September 2019, MacIntosh and Parrish resolved their
ownership dispute, and the shares previously owned by Parrish
were transferred to Clif Gentle. On or around September 19,
2019, ILJB Charlotte returned a signed copy of the
Termination Offer to Plaintiff. On the Termination Agreement
returned to Plaintiff, Defendant crossed through the
provision requiring Defendants to pay a $5000 termination fee
and the provision prohibiting Defendants from operating a
“[c]ompeting [b]usiness” as defined by the
Defendants began operating Queen City Juicery & Wellness
Bar (“Queen City Juicery”) out of the each of the
same two locations formerly operated as I Love Juice Bar
franchises. Queen City Juicery sells fresh juices, smoothies,
and plant-based products.
November 4, 2019, Plaintiff commenced this action by filing a
Verified Complaint (Doc. No. 1) and the Motion. Defendants
responded in opposition to the Motion on November 7, 2019. On
November 8, 2019, the Court ordered: (1) Plaintiff to file a
reply to Defendants' Response, addressing only matters
within the scope of the Response; and (2) Defendants to file
(or explain why they are unable to file) an affidavit or
declaration attaching and authenticating Dedria Ryan's
“emails [plural]” referenced in the last full
sentence of page four of the Response and (if not encompassed
among those emails) the “email confirmation”
referenced in paragraph eight of Brian MacIntosh's
affidavit. (Doc. No. 11). In response to the Court's
November 8 Order, Defendants filed an unsigned Affidavit of
Dedria Ryan and emails between Dedria Ryan and Clif Gentle
regarding a termination offer between Juice Bar and another I
Love Juice Bar franchise. (Doc. No. 12).
restraining orders (“TRO”) and preliminary
injunctions are considered preventive, prohibitory, or
protective measures taken pending resolution on the merits,
see Clemons v. Board of Educ. of Hillsboro, Ohio,
228 F.2d 853, 856 (6th Cir. 1956), and are considered
extraordinary relief. See Detroit Newspaper Publishers
Ass'n v. Detroit Typographical Union No. 18, Int'l
Typographical Union, 471 F.2d 872, 876 (6th Cir. 1972).
A TRO should be granted only if the movant carries his burden
of proving that the circumstances clearly demand it.
Overstreet v. Lexington-Fayette Urban County
Gov't, 305 F.3d 566, 573 (6th Cir. 2002). The court
must consider and balance four factors in determining whether
to afford such relief: (1) the likelihood of the
plaintiff's success on the merits; (2) whether the
plaintiff will suffer irreparable injury without the
injunction; (3) whether granting the injunction will cause
substantial harm to others; and (4) the injunction's
impact on the public interest. Nat'l Viatical, Inc.
v. Universal Settlements, Int'l, Inc., 716 F.3d 952,
956 (6th Cir. 2013).
these four factors are “factors to be balanced, not
prerequisites that must be met, ” Michael v.
Futhey, 2009 WL 4981688, at *17 (6th Cir. Dec. 22, 2009)
(quoting Six Clinic Holding Corp., II v. Cafcomp
Systems, 119 F.3d 393, 400 (6th Cir. 1997), they do not
carry equal weight. Regarding the third factor, irreparable
harm, “even the strongest showing on the other three
factors cannot ‘eliminate the irreparable harm
requirement.'” D.T. v. Sumner Cty.
Schools, 2019 WL 5850408, at *2 (6th Cir. Nov. 8, 2019);
Patio Enclosures, Inc. v. Herbst, 39 Fed.Appx. 964,
967 (6th Cir. 2002) (“The demonstration of some
irreparable injury is a sine qua non for issuance of
an injunction.”). Furthermore, “[a] finding that
there is simply no likelihood of success on the merits is
usually fatal.” Gonzalez v. Nat'l Bd. of
Medical Exam'rs, 225 F.3d 620, 625 (6th Cir. 2000).
In deciding whether to grant the requested TRO, the Court
makes its evaluation of these factors based on the current
record. The Court does not intend to suggest that any of its
findings herein are not subject to potential change at later
stages in this case based on a changing record.
Likelihood of Success on the Merits
the first factor, the court considers whether the movant has
demonstrated a strong or substantial likelihood of success on
the merits of its claims. NAACP v. City of
Mansfield, 866 F.2d 162, 166-67 (6th Cir. 1989). Here,
Plaintiff brings five claims against Defendants including:
(1) breach of contract; (2) misappropriation of trade
secrets; (3) trademark infringement; (4) trade dress
infringement; and (5) unfair competition. (Doc. No. 4 at
15-16). The Court concludes that Plaintiff has shown a
likelihood of success on the merits at least as to its claims
for breach of contract and trade dress infringement.
Breach of Franchise Agreements
argues that Defendants breached the Franchise Agreements by
(1) failing to pay royalty fees and/or other amounts owed to
Plaintiff, (2) opening and operating a competing business
under the name Queen City Juicery and Wellness Bar, and (3)
failing to grant Plaintiff access to its new Point of Sale
system and sales and royalties data affiliated with Queen
City Juicery and Wellness Bar. (Doc. No. 4 at 15). Tennessee
law governs this dispute. (Doc. No. 4-1 at 33 (“This
Agreement shall be governed by the laws of
Tennessee[.]”); id. at 92 (same)). Under
Tennessee law, “a viable claim for breach of contract
has three essential elements: (1) the existence of an
enforceable contract; (2) nonperformance amounting to a
breach of that contract; and (3) damages caused by the breach
of the contract.” Lewis v. MedAssets Net Revenue
Sys., LLC, No. 3:11-cv-0387, 2012 WL 3061855, at *10
(M.D. Tenn. July 26, 2012) (citing Ingram v. Cendant
Mobility Fin. Corp., 215 S.W.3d 367, 374 (Tenn. Ct.
claims that it has satisfied the first element, because the
Franchise Agreements constituted an enforceable contract with
particular provisions that Defendants breached. In response,
Defendants argue that Plaintiff lacks “an enforceable
franchise agreement” because the Franchise Agreements
were terminated by Defendants' acceptance of the
Termination Offer on (or about) September 19, 2019, thus
creating a binding agreement (the “purported
termination agreement”) whereby the Franchise
Agreements were terminated as of that date. (Doc. No. 10 at
4-6). Defendants imply that because (according to them) the
Franchise Agreements were terminated as of September 19,
Defendants could not thereafter have breached the Franchise
Court disagrees. Based on the existing record, the Court
finds that the Termination Offer was never accepted;
therefore, the purported termination agreement in fact never
came into existence and thus did not terminate the Franchise
basic principles of contract law, there must be a meeting of
the minds regarding the terms of the contract. Sweeten v.
Trade Envelopes, Inc., 938 S.W.2d 383, 386 (Tenn. 1996).
Accordingly, “[a]cceptance of an offer must be exactly
and precisely in accord with the terms of the offer.”
Westfall v. Brentwood Serv. Group, Inc., No.
E2000-01086-COA-R3-CV, 2000 WL 1721659, *5 (Tenn. Ct. App.
Nov. 17, 2000) (citing Ray v. Thomas, 191 Tenn. 195,
232 S.W.2d 32, 35 (Tenn.1950)). “Unless an acceptance
mirrors the offeror's terms, neither omitting nor adding
terms, it has no legal effect as an acceptance and operates
as a rejection and a counter offer.” Safeco Ins.
Co. of Am. v. City of White House, Tenn., 36 F.3d 540,
546 (6th Cir.1994) (citing Canton Cotton Mills v. Bowman
Overall Co., 149 Tenn. 18, 257 S.W. 398 (1924)).
to Defendants, shortly after providing them with the
Termination Agreement, Ryan, acting in her capacity as CEO of
Juice Bar, amended the terms of the Termination Agreement by
authorizing the removal of the provision for a $5000
termination fee and the noncompetition provision. Defendants
allege that “[i]n the case of [ILJB Charlotte], Ms.
Ryan confirmed her intent to have her emails allowing the
removal of these terms confirm her amendments to the
agreement.” (Doc. No. 10 at 4). In further support of
this assertion, Defendants cite to the Affidavit of Brian
MacIntosh, which states:
In response to a request that Ms. Ryan waive the termination
fee provision and the noncompetition provision, Ms. Ryan
advised me that these provisions were to be stricken form
[sic] the December 31, 2018 document and then provided email
confirmation of this change.
(Doc. No. 10-1 ¶ 8). As discussed above, the Court
ordered Defendants to file Dedria Ryan's “emails
[plural]” referenced in the last full sentence of page
four of the Response confirming her intent to have her emails
amend the Termination Agreement and, if not encompassed among
those emails, the “email confirmation” referenced
in paragraph eight of Brian MacIntosh's affidavit. (Doc.
No. 11). But the documents that Defendants filed in response
to the Court's Order do not include any emails matching
the description of the emails they referenced in the
Response. Instead, Defendants filed an unsigned proposed
affidavit of Dedria Ryan and an email chain between Dedria
Ryan and Clif Gentle in February 2019 (before Gentle became a
co-owner of ILJB Charlotte) regarding a termination offer for
Gentle's Mooresville I Love Juice Bar franchise.
initial matter, the Court will not consider the unsigned
proposed affidavit. As the Sixth Circuit has recognized,
“an ‘unsigned affidavit' is a contradiction
in terms. By definition an affidavit is a ‘sworn
statement in writing made ... under an oath or on affirmation
before ... an authorized officer.'” Sfakianos
v. Shelby County Government, 481 Fed.Appx. 244, 245 (6th
Cir. 2012) (quoting Mason v. Clark, 920 F.2d 493,
495 (8th Cir. 1990)). The unsigned proposed affidavit here
is, therefore, simply a nullity.
the emails discussing an unrelated termination agreement do
not evidence the purported amendment to the Termination
Offer. Based on the present record, Defendants' execution
and return of the Termination Agreement striking the $5000
termination fee and the noncompetition provision effected a
counteroffer, which Plaintiff never accepted and in fact
expressly rejected. (Doc. No. 4-4). Therefore, the Franchise
Agreements-the enforceability of which is not otherwise
contested-was not terminated by the purported termination
agreement, which in fact never became effective. Therefore,
the Franchise Agreements remained in effect and enforceable
until at least October 7, when Plaintiff sent Defendants a
notification of termination. (Doc. No.4-5). By this time,
Defendants had been operating independently of the I Love
Juice Bar banner for some period of time, i.e.,
since on or about September 19. (Doc. No. 10-1 at 2). Thus,
Plaintiff is likely to be able to show that Defendants'
allegedly breaching conduct occurred during a period in which
he Franchise Agreements were in effect.
whether Defendants' conduct actually amounted to a breach
of the Franchise Agreements, Defendants do not contest that
they (1) failed to pay royalty fees and/or other amounts owed
to Plaintiff; (2) opened and operated a “[c]ompeting
[b]usiness” under the name Queen City Juicery and
Wellness Bar; and (3) failed to grant Plaintiff access to its
new Point of Sale system and sales and royalties data
affiliated with Queen City Juicery. Instead, Defendants argue
only that these actions did not amount to a breach of the
Franchise Agreements because the Franchise Agreements had
already been terminated. But the Court has already rejected
the contention that the Franchise Agreements were terminated
by the purported termination agreement. Thus, because
Defendants do not contest that their actions violated the
Franchise Agreements if (contrary to Defendants'
unsubstantiated position) they were not terminated prior to
October 7, the Court has little difficulty finding that, for
the purposes of issuing a TRO, Plaintiff will likely succeed
on the merits of its breach of contract claim.
addition, the Court finds that Defendants likely have
breached Section 32 of the Franchise Agreements, including,
inter alia, Section 32(c), which requires Defendant
ILJB Charlotte, upon termination or expiration of the
Franchise Agreements, not to use or adopt the Franchise
System or any of the Propriety Marks or Intellectual
Property. (Doc. No. 4-1 at 24). The Franchise Agreements
define Propriety Marks as “the registered and
unregistered distinctive and characteristic trade names,
domain names, trademarks, service marks, logotypes, and trade
dress elements that we designate in written or electronic
form or through usage from time to time as prescribed for use
with the Franchised System.” (Id. at 32).
Although, as discussed below, the Court does not find that
Plaintiff has provided enough information to sustain a claim
for trademark infringement under the Lanham Act, it is clear
to the Court that Defendant continued to use certain of
Plaintiff's marks and thereby breach of the Franchise
Agreements. Specifically, Plaintiff has shown:
As of 4:25 p.m. on November 8, 2019, the first 14 pages of
the Photos subpage of QCJ's Facebook page alone
prominently featured at least 182 separate depictions of
Juice Bar's marks, via Juice Bar-branded bottles, cups,
growlers, carafes, shot capsules, product packaging,
promotional advertisements, gift cards, internal and external
store signage, smart phone apps and gift bags. See Exhibit 1
at 3-14. Similarly, as of 11:25 a.m. on November 5, 2019, the
most recent posts on QCJ's Instagram feed featured no
fewer than 29 separate depictions of Juice Bar's marks,
via Juice Bar-branded cups, bottles, growlers, tee shirts and
in-store signage. See Exhibit 2 at 3-9.
(Doc. No. 14 at 5). Accordingly, on the current record, the
Court finds that although Defendants' use of
Plaintiff's marks does not necessarily constitute
trademark infringement under the Lanham Act, it ...