How Not To Evade A Restrictive Covenant

Originally published at www.irvinschein.com

In the recent case of Pet Valu Canada Inc. v. 1381114 Ontario Limited, the Court dealt with a motion by a franchisor, Pet Valu Canada Inc., against a numbered company operating as "Pet Stuff & Supplies" and its principals.  Pet Valu was seeking an injunction stopping the defendants from operating a pet supply store which allegedly breached a non-competition covenant in a franchise agreement.

Robin Martin, as sole officer and director of 1381114 Ontario Limited, entered into a franchise agreement with Pet Valu that contained a restrictive covenant.  Ms. Martin personally operated the Pet Valu franchise store until the franchise agreement was terminated.