![]() ![]() When no agreement was reached Resendes signed a direct franchise agreement with Signal 88. Resendes and CSC negotiated for several months over her either purchasing CSC's franchise or compensating CSC for customers it had developed in her contemplated territory. ![]() Signal 88 informed CSC that another person, Rebecca Resendes, wished to enter into a franchise agreement for a territory in the right of first refusal area where CSC had developed contracts with some customers. At the end of the initial term, the franchisor and franchisee continued the franchise agreement on a month-to-month basis, subject to 30-day notice of termination. CSC also had a right of first refusal over additional franchises to be added within a radius of Colorado Springs. District Court for the District of Nebraska, illustrates how difficult that burden can be to meet under unfavorable facts.Ĭolorado Security Consultants, LLC (CSC), had a three year franchise agreement with franchisor, Signal 88 Franchise Group, Inc., to provide on-site security guard services within a territory in Colorado Springs. Signal 88 Franchise Group, decided in March 2017 by the U.S. ![]() The recent case of Colorado Security Consultants, LLC v. However, many courts place a heavy burden on the franchisor to prove that a preliminary injunction is proper. The ultimate weapon for a franchisor to enforce a covenant not to compete is obtaining a preliminary injunction against the former franchisee. A covenant not to compete is typically included in a franchise agreement to ensure that customer goodwill, once developed in the name of franchise, is not destroyed by former franchisees.
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