Antitrust Law Daily Wrap Up, FRANCHISING & DISTRIBUTION NEWS: Hotel franchisor sues franchisee for early termination damages, infringement, (Aug 9, 2013)

By Peter Reap, J.D., LL.M.

Hotel franchisor Super 8 Worldwide, Inc. (“SWI”), has filed a complaint in the federal district court in Newark against its former franchisee Sachin, LLC, claiming that despite being notified by SWI of its obligation to discontinue the use of all SWI marks and advertising, the franchisee persists in continuing to use the franchisor’s Super 8 marks to induce the traveling public to rent guest rooms at the formerly franchised facility.

SWI charges that the actions of Sachin constitute trademark infringement, trademark dilution, and false designation of origin in violation of the Lanham Act. Further, it contends that Sachin is committing its on-going acts of infringement maliciously, willfully, and deliberately, and that those actions are irreparably harming the franchisor. Without any adequate remedy at law, SWI requests that Sachin be enjoined from marketing or selling guest lodging services at the former franchise through and with the Super 8 marks. SWI demands compensatory and treble damages resulting from the infringing activities, along with attorney fees and interest.

SWI additionally contends that under the terms of the parties’ franchise agreement it is entitled to liquidated damages in the amount of $70,000 from Sachin’s premature termination. In the event the court declines to award liquidated damages, it seeks actual damages stemming from the premature termination. Further, SWI requests $173,473 in recurring fees that Sachin failed to pay the franchisor in breach of their agreement. Finally, the franchisor seeks to hold Prakash Patel and Bharat Patel, individual guarantors of Sachin’s obligations under the parties’ agreement, liable under their guaranty agreements.

The complaint in Super 8 Worldwide, Inc. v. Sachin, LLC, Case No. 2:13-cv-04720-WJM-MF, was filed August 7, 2013.

Attorneys: Bryan P. Couch (Clyde & Co. U.S. LLP) for Super 8 Worldwide, Inc.

Companies: Super 8 Worldwide, Inc.; Sachin, LLC.

News: FranchisingDistribution NewJerseyNews