Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—M.D. Fla.: Preliminary injunctive relief granted in dispute about circumvention of franchise agreement by proxy, (Jan 27, 2026)

By Justin Marcus Smith, J.D.

The court noted Florida courts do not hesitate to enforce non-compete agreements against non-parties through which a party conducted business.

A franchisor of cooking oil filtration and kitchen sanitizing services was entitled to preliminary injunctive relief on trademark infringement and non-compete claims in connection with an erstwhile franchisee’s apparent attempt to circumvent the parties’ franchise agreement (FA), held the federal district court in Orlando, Florida. The court analyzed how plaintiff-franchisor, The Filta Group (Filta), was likely to succeed on the apparently clear merits of trademark infringement and restrictive covenant enforcement claims. The court also found Filta satisfied the other elements required for preliminary injunctive relief, especially where potential harm to the franchisee and an alleged conspiring business would be self-inflicted to the extent they chose to violate the FA. The court analyzed at some length how the preliminary injunction would bind the alleged conspiring business even though it was not a signatory to the FA. The court also found that a 25-mile distance beyond the perimeter of the formerly assigned franchise territory was not unreasonable (Filta Group, Inc. v. LXU, Ltd., No. 6:25-cv-00914-PGB-NWH (M.D. Fla. Dec. 12, 2025)).

Background. Filta, a franchisor of Mobile Filtration Unit (MFU) cooking oil microfiltration and FILTACLEAN® kitchen sanitization, alleged that defendant-franchisee LXU, Ltd. (LXU) conspired with defendant Kitchen Kare Innovations (KKI) to provide kitchen ventilation hood cleaning services in violation of the Filta franchise agreement (FA).

Among many other details of this dispute, LXU’s owner conceded he violated the FA by failing to have employees sign confidentiality agreements, performing work outside the designated LXU territory, and denying Filta access to books, records, and facilities. Motion hearing testimony also established that LXU’s owner transitioned all of LXU’s employees and its MFU -equipped vans, which bore the Filta marks, to KKI. The net effect of LXU’s termination of the FA and a letter LXU sent to 450 LXU franchise customers using the Filta mark was to provide KKI and its defendant-owner with immediate access to LXU customers to upsell hood cleaning services. LXU’s defendant-owner testified that KKI essentially served as a placeholder to maintain customers while LXU and KKI’s owner found a way to circumvent the FA non-compete clause. According to the court, KKI ultimately kept 150 LXU customer accounts which grew its business at least threefold.

The court granted Filta’s motion for a preliminary injunction on its breach of restrictive covenant and trademark infringement-based claims.

Trademark infringement. First, the court found Filta likely to succeed on the merits of its claims based on trademark infringement under the Lanham Act. Filta submitted evidence at the preliminary injunction hearing that LXU and KKI sowed confusion in the oil delivery and oil filtration marketplace because they continued to run an oil delivery and filtration business using the Filta marks with KKI issuing invoices.

Second, the court found continued use of the Filta marks would irreparably injure Filta. Filta was entitled to a rebuttable presumption of irreparable harm pursuant to the Trademark Modernization Act of 2020. Filta established a likelihood of success on its claims, so it was entitled to the presumption of irreparable harm.

Even without that presumption, which the defendants did not rebut, Filta met its burden of showing irreparable injury, in light of the strong likelihood of consumer confusion and substantial likelihood of Filta success on the merits, if the defendants’ actions were allowed to continue.

Third, in the balance of harms, the threatened harm to Filta outweighed any the defendants would suffer from injunctive relief. Any harm to the defendants would be self-inflicted for having chosen to keep operating in the cooking oil delivery and filtration industry after termination of the FA was outweighed by damage done to Filta through Filta trademark infringement.

Fourth, the court found preliminary injunctive relief would not be adverse to the public interest. The public has an interest in the proper use of trademarks. Granting injunctive relief to Filta would serve the public interest by preventing consumer confusion.

Restrictive covenants. The court similarly found Filta likely to succeed on its claim for enforcement of the FA restrictive covenants. The FA specified a choice of Florida law, and LXU’s owner expressly agreed to abide by the restrictive covenants in his guaranty, included in the FA. The court found the covenants were meant to support legitimate business interests, making them enforceable under Florida law.

Filta had a legitimate business interest in protecting its marks and goodwill in the territories where the defendants continued to operate in the oil delivery and filtration industry. It also had a legitimate business in preventing unauthorized use of its confidential information obtained through the franchise relationship, including customer lists.

Without an injunction, Filta would be unable to re-franchise the territories due to the defendants’ competing business. Moreover, the court found the restrictions reasonable in the 2-year time, 25-mile distance beyond the outer perimeter of an assigned territory, and specified line of business. The restrictive covenant was narrowly tailored and reasonably formulated to protect Filta’s legitimate business interests. The 2-year term was reasonable to give Filta a fair opportunity to establish a new franchise in LXU’s former territory.

The court noted Florida courts do not hesitate to enforce non-compete agreements against non-parties through which a party conducted business, even where an individual was the only signatory to the non-compete, because parties should not be able to evade non-competes by using a strawman. District courts also routinely enter preliminary injunctions similarly, and Fed. R. Civ. P. 65(d)(2) makes it clear that an injunction will bind “other persons” in active participation with parties. The injunction would bind the LXU defendants and the KKI defendants alike.

Filta also demonstrated irreparable injury because violation of an enforceable restrictive covenant creates a presumption of irreparable injury.

The balance of harms favored Filta in the same way it did with respect to trademark infringement. Any harm to the defendants would be self-inflicted for having chosen to keep operating in the subject industry after termination of the FA.

The court also found a preliminary injunction would not be adverse to the public interest because it would encourage people to adhere to contractual obligations. Florida law clearly supports injunctions to enforce reasonably restrictive covenants in franchise agreements.

The Case is No. 6:25-cv-00914-PGB-NWH.

Judge: Byron, P.

Attorneys: Michael Douglas Joblove (Venable LLP) for Filta Group, Inc. John (Hui) Li (JHL Legal LLC) for LXU, Ltd.

Companies: Filta Group, Inc.; LXU, Ltd.

Cases: FranchisingDistribution FloridaNews GCNNews