Canada: The Superior Court Refused To Issue An Interim Injunction To Prevent The Operation Of A Restaurant, Which Would Violate The Non-Competition And The "Disidentification" Obligations Under A Franchise Agreement.
Groupe Sportscene inc. v. 2639-6564 Québec
Inc.,2013 QCCS 17
The petitioner was acting as a franchisor for the respondent
franchisee, 2639-6564 Québec Inc. to operate the restaurant
La Cage aux sports located in Boucherville. The franchise
agreement stipulated certain obligations of non-competition and of
"disidentification" in favor of the franchisor. Thus, for
a period of two years after the end of the agreement, the
respondent could not operate a restaurant and specialize in steak,
chicken or ribs or even offer sports-related entertainment or
décor. These restrictions applied within a radius of five
miles from the franchised restaurant. In addition, the respondent
had to eliminate all distinctive signs that could identify the
franchisor, including the arrangement of the red and white colors
and anything that is likely to cause confusion or error on the part
of the public.
The franchisee has not renewed the franchise agreement and
decided instead to open the restaurant Le Chêne
Blanc at the former location of La Cage aux sports.
In its request, the petitioner claimed that several elements of
this new restaurant violated the franchise agreement, including the
siding and the landscaping of the building, the presence of
televisions, as well as the menu and presentation of the meals. The
petitioner claimed an apparent right to protect its trademarks,
clientele as well as expertise, and that the balance of convenience
played in its favor. In addition, the petitioner argued that
illegal appropriation of its customers by the respondent
constitutes an irreparable harm that is extremely difficult to
quantify. Finally, the petitioner pleaded the urgency that an
interim injunction order be granted, given its intention to open a
new La Cage aux Sports restaurant in Boucherville in the
The respondent claimed that there was no urgency to proceed on a
provisional basis as one month has elapsed since the opening of
Le Chêne Blanc and given that the petitioner had
been informed throughout the progression of the construction. In
addition, the respondent argued that there was no possibility of
confusion between the restaurant concept of La Cage aux
sports and that of Le Chêne Blanc. In short,
there was no justification that an interim injunction be
According to the Honourable Justice Gouin, the petitioner has
not satisfied any of the criteria necessary to grant an interim
Justice Gouin first points out that the opening of a La Cage
aux sports restaurant in Boucherville, in the short term,
remains uncertain and therefore there is no urgency justifying the
issuance of an interim injunction.
Similarly, Justice Gouin concluded that there was, prima
facie, no risk of confusing the public. The external
appearance of the Le Chêne Blanc restaurant is like
all the other adjacent shops that are part of the same building
complex, such as Thaï Express, Mikes or Tim Hortons, that
being exterior walls having white siding and red columns. Only
their respective banners distinguish them. Thus, according to the
Court, a potential client's choice of restaurant is not based
on the red and white exterior, but rather based on the
Finally, Justice Gouin concluded that the petitioner has not
established that there is a serious and irreparable harm because,
at first glance, the concept of the Le Chêne Blanc
restaurant is different from that of La Cage aux sports
and seems to target a different clientele. As a result, granting
the franchisor's request would cause prejudice to the
respondent, who has invested substantial sums of money to create
its new concept.
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