A Tale Of Two Non-Competes: Why Drafting Matters

In a recent blog, we cautioned readers that an overprotective non-compete can result in no protection at all. In that case, Unlimited Opportunity, Inc. v. Waadah, a franchisor could not enforce a non-compete clause despite its franchisee's clear violation. 861 N.W.2d 437 (Neb. 2015).

A recent case, JH Inc. v. Cline, paints a rosier picture for franchisors. No. 14-6931 (D.N.J. Oct. 29, 2015). Here too, the allegations stated a blatant violation of a non-compete. But while Waadah was a drafting cautionary tale, Cline shows why certain provisions should be on the drafting checklist. In this blog, we'll explain how certain franchise agreement provisions paved the way for a preliminary injunction prohibiting a former franchisee from competing.