A gym franchisor recently secured a preliminary injunction against its former franchisee prohibiting the franchisee from operating an independent gym on the same location and using the franchisor’s trade secrets.

Chris O’Hare, along with his company, (O’Hare), was a former Core Progression gym franchisee. A few months after the opening of his Core Progression gym in North Carolina, O’Hare stopped paying the royalties and began to convert the Core Progression gym to an independent gym called Altru Fitness. The plaintiff Core Progression Franchise LLC (Core Progression) filed suit alleging that O’Hare breached the non-compete covenant in the franchise agreement and infringed on Core Progression’s trademarks in violation of the Lanham Act. O’Hare alleged that the franchise agreement was unenforceable as it was induced by Core Progression’s fraudulent representation of future profit. Core Progression filed a motion for preliminary injunction to prohibit O’Hare from operating an independent gym in the same location and continuing to use its trademarks and trade secrets. The U.S. District Court for the District of Colorado granted the preliminary injunction, and the decision was affirmed the Tenth Circuit.

Republished with permission. This article "LADR Case Notes (August 2022–October 2022) and FLJ Currents (Winter 2023)" was originally published in Franchise Law Journal on June 8, 2023