Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION—N.D. Ill.: Meineke secures preliminary injunction to stop former franchisee from continuing to use trademarks, goodwill, (Mar 17, 2026)

By Justin Marcus Smith, J.D.

Putative illegal termination of a franchise agreement was not a defense to trademark infringement or unfair competition claims.

Plaintiff Meineke Franchisor SPV LLC (Meineke) more than adequately established that it was entitled to preliminary injunctive relief in a trademark infringement and unfair competition dispute with a former franchisee, held the federal district court in Chicago. Whether Meineke terminated the franchise legally was not a defense to trademark infringement. Meineke’s likelihood of success on the merits, and of irreparable harm to Meineke and the public interest in the absence of preliminary injunctive relief, were all clear on undisputed facts that pointed to consumer confusion. In contrast, a preliminary injunction would not stop the former franchisee from continuing to operate independently, to serve customers, and to make its best effort at preserving employee jobs. It would just have to work toward those goals under different branding. The court accordingly ordered the franchisee to (1) cease and desist from using the Meineke trademarks, phone number, and other intellectual property; (2) remove all signage, promotional items, and materials bearing Meineke indicia; and (3) file a verified statement of compliance (Meineke Franchisor SPV LLC v. Moriarty, No. 1:25-cv-09239 (N.D. Ill. Mar. 13, 2026)).

Background. Meineke, a franchisor of automotive repair centers, moved for a preliminary injunction after it filed a complaint against a natural person former franchisee. The Meineke complaint claimed breach of contract, trademark violations, and unfair competition under the Lanham Act. Meineke alleged the franchisee failed to make certain payments and continued to use Meineke’s trademarks after Meineke terminated the franchise.

The franchisee had operated a Meineke franchise since 1985. According to the franchisee, the relationship began to unravel with the introduction of new accounting software in 2014. The franchisee alleged Meineke did not provide adequate training on how to use the software. The franchisee did not dispute Meineke allegations that he continued to use Meineke’s logos, including on a roadside billboard and on his business card.

Meineke sought to enjoin the franchisee from using Meineke trademarks; to require surrender of all marked materials; and to file a notice of compliance. Meineke also sought costs and attorney’s fees. The court granted Meineke’s preliminary injunction motion in part.

Likelihood of success. The court found Meineke more than adequately established a likelihood of success on the merits. Meineke presented undisputed evidence of its trademark registrations and that the franchisee was continuing to use Meineke trademarks after franchise termination. The court found consumer confusion was inevitable and held that confusion existed as a matter of law. The franchisee did not raise a meaningful dispute about this. However, he contended that Meineke breached the franchise agreement first and continued to accept his royalty payments after termination through January 2025.

The court analyzed that the franchisee’s status as a holdover franchisee established more than a mere possibility of success on the merits. The context of the franchise agreement was “irrelevant” to the trademark inquiry because the franchisee admitted Meineke had terminated the franchise agreement. Although there might be monetary remedies for an illegal termination, for example, suing for breach of contract, illegal termination of a franchise agreement could not be a defense to trademark infringement or unfair competition claims.

Having found that Meineke more than adequately established a likelihood of success on the merits of its trademark infringement and Lanham Act claims, the court said it did not need to consider the likelihood of success on the contract claim. Analysis of the contract claim was irrelevant to the Lanham Act claims and not necessary for the injunction to issue.

Irreparable harm. The court rejected the franchisee’s contention that Meineke did not have a credible claim of harm to goodwill. The franchisee alleged that Meineke permitted him to continue operating the former franchise business during reinstatement discussions and accepted thousands in royalty payments during and after the alleged termination period.

The court said the franchisee’s argument was without merit because Meineke was presently accepting nothing, knew nothing of the services the franchisee was providing, and could not ensure quality control. The court said this situation was precisely what the Seventh Circuit has deemed to involve irreparable harm. That was especially so given that Meineke apparently had to mitigate the former franchisee’s disputes with customers. The prior relationship, and past payments that appeared to have ended more than a year ago, could not overcome the presumption of harm associated with the franchisor’s present and ongoing loss of control.

Although money damages for breach of contract might be available, they would not necessarily suffice for the separate and intangible loss of goodwill and control.

Balance of harms. The court rejected the franchisee’s contention that an injunction would effectively shut down his business, thereby tipping the balance of harms in his favor. The Seventh Circuit has emphasized that injunctions in situations like this do not stop a defendant from maintaining relationships with existing clients or developing new business. The franchisee only needed to stop using Meineke’s trademarks, trade dress, and other indicia of affiliation.

The court said Meineke’s assertion that it previously had to mitigate customer disputes with the franchisee was particularly persuasive. The court also noted the difficulty of replacing the former franchisee while it continued to occupy the local market. An injunction would leave the former franchisee free to continue operating independently, and potentially preserving jobs and customer relationships merely under different branding, whereas Meineke would have great difficulty re-entering the market without the benefit of injunctive relief.

The public also had an interest in knowing with whom it was doing business. Enforcement of the trademark laws minimizes consumer confusion.

The Case is No. 1:25-cv-09239.

Judge: Jenkins, L.

Attorneys: Dennis D. Leone (Dinsmore & Shohl LLP) for Meineke Franchisor SPV LLC. Thomas W. Lynch (Thomas W. Lynch, P.C.) for Kevin Moriarty.

Companies: Meineke Franchisor SPV LLC

Cases: FranchisingDistribution IllinoisNews