The plaintiff franchisor sought an interlocutory injunction to enforce restrictive covenants against the defendant franchisee, who had purported to terminate the franchise agreement and opened a competing fitness studio.
The dispute arose after the franchisor implemented a direct-to-consumer online fitness program during the COVID-19 pandemic, which the franchisee alleged constituted a fundamental breach.
The court dismissed the motion, finding that while there was a serious issue to be tried regarding fundamental breach, the franchisor failed to establish a strong prima facie case, and the balance of convenience did not favour granting the injunction given the imminent expiration of the agreement and the potential loss of livelihood for the franchisee's employees.
