September 12, 2025|Franchise Frontlines
September 12, 2025 | U.S. District Court for the Eastern District of Michigan | Unpublished Opinion
Executive Summary
In an unpublished opinion, Judge Stephen J. Murphy III of the Eastern District of Michigan granted Beyond Juicery + Eatery Franchising, LLC’s motions for default judgment against a former franchisee and its guarantor after both defendants stopped defending the lawsuit. Beyond Juicery alleged that the franchisee failed to pay required fees, continued operating after termination, and continued using the brand’s trademarks without authorization. The defendants initially appeared but later failed to comply with court orders, resulting in entries of default. The court determined that Beyond Juicery had established a contractual breach, trademark infringement under the Lanham Act, and unfair competition, and it awarded compensatory damages, liquidated damages, statutory damages, attorneys’ fees, and permanent injunctive relief. The court denied the earlier motion for a temporary restraining order as moot following entry of final judgment.
Relevant Background
According to the allegations in the complaint, Beyond Juicery entered into a franchise agreement with JP Juice, LLC in March 2020. The owner, Philip Batten, allegedly executed the Franchise Agreement both on behalf of the entity and in his personal capacity through a Guaranty. Beyond Juicery alleged that JP Juice later failed to pay contractually required royalty, marketing, and technology fees, and that the franchisor terminated the franchise in April 2025. The complaint alleged that despite termination, the former franchisee continued operating the store and continued using Beyond Juicery’s trademarks.
Beyond Juicery filed this action seeking damages and injunctive relief. Defendants initially responded through counsel, including filing an answer and opposing preliminary relief. When their lawyer withdrew, the court ordered the corporate defendant to obtain new counsel and ordered Mr. Batten to file a notice confirming he intended to proceed. Neither complied. The clerk entered defaults, and Beyond Juicery filed motions for default judgment supported by affidavits and documentation regarding past-due fees, liquidated damages, and trademark use.
Decision
The court granted the motions for default judgment and held that Beyond Juicery was entitled to relief on its breach-of-contract and trademark claims.
The court found that the Franchise Agreement and Guaranty were valid and enforceable and that the allegations—taken as true after default—established that JP Juice failed to pay required fees and failed to comply with post-termination obligations. The court concluded that the guarantor was personally liable because the Guaranty expressly bound him to the Franchise Agreement’s provisions.
On the Lanham Act claims, the court found that the complaint alleged that JP Juice continued using Beyond Juicery’s registered trademarks after termination and without consent. The court explained that likelihood of confusion is inherent when a former franchisee continues using the franchisor’s marks, making the allegations sufficient to establish trademark infringement and unfair competition for purposes of default judgment.
The court awarded several categories of damages. It found that documentary evidence supported the franchisor’s request for $32,926.95 in unpaid royalties, marketing fees, and technology fees. The court also enforced the Franchise Agreement’s liquidated-damages provision, calculating the amount based on three years of average weekly royalties as outlined in the contract. The court found the liquidated-damages formula sufficiently tied to expected future losses and therefore enforceable under Michigan law.
The court awarded $125,000 in statutory damages under the Lanham Act, finding that continued use of the franchisor’s marks was willful and that the requested amount was within the statutory range and consistent with similar awards. It also found that the attorneys’ fees requested—supported by affidavits, billing records, and rate-survey data—were reasonable under Michigan’s standards for contractual fee recovery.
Finally, the court entered a permanent injunction. The injunction required the former franchisee to cease using Beyond Juicery’s marks, close the unauthorized business, return proprietary materials, assign the store’s lease to Beyond Juicery or its affiliate upon request, and comply with the Franchise Agreement’s 36-month, 20-mile noncompete. The court found that injunctive relief was warranted based on the findings of trademark infringement and the contract’s restrictive-covenant terms. With judgment entered, the earlier motion for a temporary restraining order and preliminary injunction was denied as moot.
Looking Forward
This decision may offer franchisors insight into how courts approach enforcement actions when a former franchisee continues operating after termination and later ceases participation in litigation. While outcomes depend on the specific facts and governing law, this ruling shows how courts may enforce post-termination provisions, award liquidated damages tied to future lost royalties, and grant statutory trademark damages when a terminated franchisee continues using brand identifiers.
The ruling also illustrates the importance of clear drafting in Franchise Agreements. Provisions governing fee payment, termination procedures, post-termination obligations, and personal guaranties were central to the court’s findings. Similarly, the judgment reflects how courts may treat unauthorized post-termination use of trademarks as inherently likely to cause confusion, supporting both injunctive relief and statutory damages.
Although each case involves a distinct factual record, franchisors may take note of how courts evaluate requested injunctive restrictions, including noncompete clauses in franchise documents. As always, courts may reach different conclusions depending on the jurisdiction, the evidentiary record, and the particular terms at issue, but this decision provides an example of how a franchisor’s contractual and trademark rights can be vindicated when a former franchisee fails to honor post-termination obligations.
This article is based solely on the opinion of the Court in this matter. The author has not conducted any independent investigation into the facts. For the avoidance of doubt, each statement related to the law and facts in this article is drawn from the Court’s opinion in this case.
Thomas O’Connell is a Shareholder at Buchalter APC and Chair of the firm’s Franchise Practice Group. For questions about this article or media inquiries, you can contact Tom at toconnell@buchalter.com.
This communication is not intended to create, and does not create, an attorney-client relationship or any other legal relationship. No statement herein constitutes legal advice, nor should it be relied upon or interpreted as such. This communication is for general informational purposes only and is not a substitute for legal counsel. Readers should not act or refrain from acting based on any information provided without seeking appropriate legal advice specific to their situation. For more information, visit www.buchalter.com.
