Preview
1 David D. Schneider # 211498
Ross Coker #306670
2 FENNEMORE DOWLING AARON
8080 N Palm Avenue
E-FILED
J Third Floor 2/9/2021 5:48 PM
Fresno, California 93711
Superior Court of California
4 Tel: (559) 432-4500 / Fax: (559) 432-4590
dschneider@fennemorelaw. com County of Fresno
5 rcoker@fennemorelaw. com By: K. Daves, Deputy
6 Attorneys for Plaintiff
DELI DELICIOUS FRANCHISING, INC
7
8
9 SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 COUNTY OF FRESNO
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t2 DELI DELICIOUS FRANCHISING, INC., Case No. 2ICECG00287
13 Plaintiff, MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT OF DELI
t4 v DELICIOUS FRANCHISING, INC.'S
EX PARTE APPLICATION FOR
15 VAHID MISAGHI and DOES I through 25, TEMPORARY RESTRAINING ORDER
inclusive, AND ORDER TO SHO\il CAUSE RE
t6 PRELIMINARY INJUNCTION
Defendant AGAINST DEFENDANT VAHID
T7 MISAGHI
18 Date: February l0r202l
Time: 3:30 p.m.
t9 Dept. 501
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1 TABLE OF CONTENTS
2
J r. SUMMARY OF RELIEF REQUESTED............ 1
4 II. INTRODUCTION....... L
5
III. BACKGROLIND FACTS 2
IV. DISCLOSURE OF PREVIOUS PETITIONS 7
6
V. COMPLIANCE WITH NOTIFICATION REQUIREMENTS 7
7 VI. ARGUMENT 7
I A. Franchisee Has Breached The Franchise Agreements In Multiple Material V/ays. 8
9
B. The Grant Of Injunctive Relief Is Required Because Franchisee's Continued Breaches
Of The Franchise Agreements Are Irreparably Harming DDFI. 9
10
i. Legal Standards 9
11 a. Ex Parte &.Injunctive Relief 9
t2 ii. Good Cause Exists For The Court To Grant This Application. 10
13
a. Franchisee agreed that DDFI may obtain injunctive relief to enjoin his breaches
of the Franchise Agreements. 10
t4 b. Injunctive Relief Is Necessary To Prevent DDFI From Continuing To Suffer Great
And Irreparable Injury .......... 10
15
c. DDFI's Rights V/ill Continue To Be Violated If This Application Is Denied. ....12
t6
d. DDFI's Remedy atLaw is Inadequate. ....... 12
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e. The Balancing of Harms Weighs in Favor of DDFI. ............13
18 iii. DDFI Is Not Required To Post An Injunction Bond ............. t4
t9 il CONCLUSION ............ 15
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1 TABLE OF AUTHORITIES
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J
Cases
Abrams v. St. John's Hospital & Health Center (1994)25 CaL App. 4th 628 ........ 9
4
Bank of the West v. Superior Court, (1992) 2 CaL th 1254 ......... 8
5
Careau & Co. v. Security Pacific Business Credit, Inc. (1990)222 CaI.App.3d 1371 8
6
Dingleyv. Buclcner (1909) 11Cal.App. 181 9, 12
7
v. Ahmans on (1985) 1 68 Cal.App.3d I 1 9............. 9
I Heckmann
Husain v. McDonald's Corp. (20t2) 205 Cal.App.4th 860 12,13
9
I.T. Corp. v. County of Imperial (1983) 35 Ca1.3d 63 9
10
o 12,13
Jay Bharat Developers, Inc. v. Minidis (2008) 167 Cal.App. th 437
11
Kingv. Meese (1987) 43 Cal.3dt2I7.... 10, 14
t2
Lenardv. Edmonds (1957) 151 Cal.App.2d764... 9
13
t4 Mc Donald's Corp. v. Robertson (llth Cir. 1998) 147 F.3d 1301.......... ........ 12
Moorpark Homeowner's Assn. v. VRT Corp. (1998) 63 CaL App. 4th 1396..... 9
15
t6 Palmer v. Truck Ins. Exchange (1999) 2l Cal.4th 1 109 I
Pro-Family Advocates v. Gomez (1996) 46 CaL App. 4th 1674.......... ..... 10
t7
18
Rosen v. State Farm General Ins. Co. (2003) 30 Cal.4th 1070 I
T9
Rossi v. Rossl (1955) 134 Cal.App.2d639... 9
S & R Corp. v. Jiffy Lube Intern., Inc. (3d Cir. 1992) 968 F.2d37l .12
20
2l Statutes
Code of Civil Procedure Section 526........... 11,13
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1 I. SUMMARY OF RELIEF REOUESTED
2 Plaintiff DELI DELICIOUS FRANCHISING, INC. ("DDFI") submits the
J following Memorandum of Points and Authorities in Support of its Application for Temporary
4 Restraining Order and request for the setting of an Order to Show Cause re why a Preliminary
5 Injunction should not issue against Defendant VAHID MISAGHI ('oFranchisee").
6 il. INTRODUCTION
7 Franchisee operates two DDFI franchised restaurants in Fresno, California.
I Franchisee is currently operating those restaurants in violation of several of his material obligations
9 under the subject Franchise Agreements and such non-compliance is causing DDFI to suffer
10 irreparable harm. DDFI requests that this Court issue a Temporary Restraining Order and a
l1 Preliminary Injunction to enjoin/mandate Franchisee and his agents, servants and employees, and
I2 all persons acting under, in concert with, or for him:
13 i. From continuing to violate the Franchise Agreements by posting in his
restaurants unapproved signage that is derogatory to DDFI and other
I4 franchisees in DDFI's system and encourages customers to follow
electronic links to a website containing malicious, outrageous and
15 defamatory content about DDFI which is irreparably-damaging DDFI;
t6 ii. To immediately remove all unapproved signage from the Restaurants;
l7 iii. From continuing to violate the Franchise Agreements by purchasing
bread from any vendor other than the vendor designated by DDFI;
18
iv. From continuing to violate the Franchise Agreements by serving bread
t9 purchased from a vendor other than the vendor designated by DDFI,
i.e., D.D.'s Bakery;
20
v. To comply with the Franchise Agreements by purchasing all bread for
2t use in the subject restaurants from D.D.'s Bakery (or an alternative
vendor approved by DDFI);
22
vi. To comply with the Franchise Agreements by purchasing, installing
23 and displaying at the subject restaurants, within 30 days after the date
that the preliminary injunction issues, the currently required digital
24 menu boards; and
25 vii. To comply with the Franchise Agreements by using the correct
packaging for the Deli Delicious food products.
26
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1 DDFI also seeks an order requiring Franchisee to pay DDFI the aggregate costs it incurs to
2 obtain a temporary restraining order and a preliminary injunction, including attorney's fees and
a
J court costs, pursuant to Section XXV (G) of the subject Franchise Agreements.
4 UI. BACKGROUND F'ACTS
5 Deli Delicious restaurants offer premium deli sandwiches and other products for
6 sale. (Declaration of Hesam Hobab In Support Of Ex Parte Application ("Hobab Decl."), tf a.) Deli
7 Delicious started in the early 1990's as a family deli shop in Fresno and has grown to more than 50
8 franchised restaurant locations whose operations are governed by franchise agreements between
9 DDFI and each DDFI franchisee. (Hobab Decl.,'lf 5.) The Deli Delicious franchise system is
10 successful because of its commitment to the provision of uniform and consistent customer
11 experiences through among other things, friendly service, use of high quality ingredients, including
T2 produce, premium quality meats, and special proprietary breads fhatacustomer can only get at Deli
13 Delicious restaurants. (Hobab Decl.,'lf 6.)
t4 Franchisee is a franchisee of DDFI and is operating two Deli Delicious franchised
15 restaurants in Fresno, one located at 6034 N. Figarden Dr. (the "Figarden Restaurant"), the other
I6 located at 6701 N. Milburn Ave. #120 (the "Milburn Restaurant," and collectively with the
o'Restaurants").
17 Figarden Restaurant, the (Hobab Decl., T 7-8.) Franchisee operates the Restaurants
18 pursuant to separate franchise agreements between Franchisee and DDFI (the "Franchise
T9 Agreements"). (Hobab Decl., fl 9.) True and correct copies of the Franchise Agreements are
ooA" (Figarden
20 attached as Exhibits Restaurant) and "B" (Milburn Restaurant) to the Hobab Decl.
2t Pursuant to the Franchise Agreements, Franchisee is required to adhere to DDFI's
22 signage standards, to refrain from doing any act injurious or prejudicial to the goodwill of DDFI's
23 names and marks andlor DDFI's franchise system, to purchase and use products (including bread)
24 from vendors designated by DDFI, to use and display DDFl-required menu boards in the
25 Restaurants, and to use the DDFl-designated packaging materials for sandwiches. (Hobab Decl., fl
26 10, Ex.,
o'4" and "B.")
27 Prior to February 5,2019, bread products used in the DDFI franchises were provided
28 by a third party bakery designated by DDFI (the "Third Party Bakery"). (Hobab Decl., flll.)
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1 Effective on February 8,2019, DDFI elected to remove the Third Party Bakery as its designated
2 bread vendor and designated its affiliate, D.D.'s Bakery, as the vendor for all bread to be used in
J its franchised restaurants. (Hobab Decl., n I2.)
4 D.D.'s Bakery is a Certified Organic Bakery. (Hobab Decl., t[ 13.) D.D.'s Bakery's
5 bread has natural ingredients and, unlike the bread that was supplied by the Third Party Bakery, is
6 made with 100% organic flour. (Hobab Decl., f 14.) As of July 31,2019, D.D.'s Bakery was
ooC.")
7 certified organic by the California Certifìed Organic Farmers. (Hobab Decl., fl 15, Ex. D.D.'s
8 Bakery's wheat bread is 100% whole wheat. (Hobab Decl., T 16.) D.D.'s Bakery's Dutch Crunch
9 bread recipes were developed under the supervision of a third-generation Dutch baker. (Hobab
10 Decl.,1T 17.) D.D.'s Bakery's bakery products are made with proprietary flour created specifically
1t for DDFI. (Hobab Decl., 'ï 1S.) Deli Delicious restaurants are lawfully permitted to market and
t2 promote that its bread products are made with organic flour. (Hobab Decl., T 19.)
13 Section XII (GENERAL OBLIGATIONS OF FRANCHISEE) of the Franchise
14 Agreements provides, in relevant part:
15 A. Follow Operations Manual and Directives of Franchisor
T6 Franchisee agrees that use of Franchisor's System and adherence to our
Operations Manual (the "Manual"), and to Franchisor's standardized design and
I7 specifications for decor and uniformity of the Restaurant are essential to the
Franchisor's trademarks and service matks, as well as the image and goodwill
18 thereof.. .. In order to further protect the System, our trademarks, our service
marks, and our goodwill, Franchisee shall:
t9
1. Operate the Restaurant and use our Manual(s) solely in the manner prescribed
20 by Franchisor;
21 3. Follow the methods of operation, food preparation, presentation of Products
and Services so as to conform to the specifïcations and standards ofFranchisor in
22 effect from time to time;
23 4. Use only such amounts and so
as to conform to Franchisor's specifications . . . (Emphasis added.);
24
5 P menu items
25 or and not sell
26 the Franchisor at shall
ln to all
27 in the F to not approve any
uct or menu any reason whatsoever or for no reason whatsoever
28 added.);
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1 6. ue sellin or menu item, program or service
Franchisor
2 bsolute delete any reason
or no reason s added.);
a
J
7. Maintain in sufficient supply and use at all times, only such products,
4 ingredients, ... supplies, ... and methods of service as to conform to our standards
and specifications; and to refrain from deviating bv using non-conforming
5 items or methods without o
6 8. Purchase Droducts, ingredients, supplies, ...
fixtures ... as may be required by us will be uired
7 bread ... either from
8
15 or other a
9 sell menu item or
harmful to the
10 on
f .... The above
11 related to our
en ch the
t2 (Emphasis );
13 18 tion of the and
Delicious TM and
t4 added.)
15 H. Operate Restaurant in Strict Conformity to Requirements
l6
T7
18
r9 ln to be
20 . . which
disa
2T
that all tn
22
that
23 and
detrimental to the
24 the use
conforming items o S consent.
25 (Emphasis added.)
26 I. Use of Approved Products. Vendors. Suppliers and Kitchen Equipment
27 . . Currentlv the Franchisor and/or its affiliates are the only approved
supplier for bread .. .. (Emphasis added.)
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1 . . . In addition Franchisee acknowledges that:
2 2. To insure the consistent hieh quality and uniformitv of Product and
Se
J purchase all products, ingredients . . . for use in the operation of a Deli
DeliciousTM restaurant, from us and/or our affiliates or those approved
4 vendors ... who demonstrate to Franchisor's continuing satisfaction an ability to
meet Franchisor's standards and specifications. (Emphasis added.)
5
5 s or otherwise o'Deli
6 servlces, ffiãY' to
and for sale Franchisor.
7
8
6. Franchisee acknowledges and agrees that Franchisee's Restaurant will feature
9 certain menu items and Products associated with a Deli DeliciousrM restaurant ....
lm of and uniform of and the
10
mutual benefit of the that X'ranchisor controls the
11
to such Prod whether or not such Products are
t2
Franchisor and shall purchase solelv from Franchisor and/or its affiliates
13 (Emphasis added.)
14 7
from
l5 to extent
This includes without limitation: packaging materials,
t6
t7 12. ... Franchisor shall have unlimited discretion to approve or disapprove
e to sell
l8
t9 J. Use Approved Design and Signage
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shall not lace
2t consent.
22 a. Permit Franchisor to Enter Restaurant
23 to enter
24 and the erations of the
Restaurant.
25
26 Also, Section XII. Paragraph N of the Franchise Agreements requires Franchisee to
27 display updated menu boards in the Restaurants and provides in relevant part:
28
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1 Franchisee understands and acknowledges that everv detail of the desisn and
of the Restaurant is to the
2
to increase the for the Products
1
J
agrees we may upon
4 add to, modi$ or change the System, including without limitation
the adoption and use of new or modified ... menu items, recipes, ingredients, food
5 preparation and techniques, Products, . .. menu boards, .. ..@
to promntlv accept. implement. use and display in the operation of the
6 Restaurant, all such additions. modifications and changes at Franchisee's
expense. (Emphasis Added.)
7
I Section XIX. Paragraph E of the Franchise Agreements requires that Franchisee not
9
divert business impermissibly away from Deli Delicious and provides in relevant part:
10
During the term of this agreement . . . , its
11 officers, directors, shareholders, managers, or partners E!l!4!, either
directly or indirectly . . . [dlo or perform, directly or indirectly, 4Iy
T2 other act iniurious or preiudicial to the goodwill associated with the
Names and Marks or the Svstem or both . . . . (Emphasis Added.)
13
I4 As of the time this Application was filed Franchisee is wrongfully, and in breach of
his obligations under the Franchisee Agreements as outlined hereinabove:
15
T6
(a) Failing to comply with DDFI's signature standards by displaying, without
DDFI's consent, signage in both Restaurants with content that is injurious and highly prejudicial to
t7
ooWe
DDFI, other DDFI franchisees, and DDFI's entire franchise system, to wit, signs reading:
18
Vølue our Loyal Customers; That's why we refuse to sell D.D.'s FROZEN BREAD øt thß
T9
locatíon. Help us stop the bullying ønd keep D.D.'s frozen breød out of your sandwích. Please
20
scøn and sign" (emphases added) (the "Signage"). (Hobab Decl., n22,25.) The Signage contains
2T
a "QR code" and encourages Deli Delicious customers and the public at large to scan that code.
22
Once scanned by a smartphone or other smart device, the QR code leads customers/the public to a
23
website containing false and defamatory information about DDFI that is ineparably injurious and
24
highly prejudicial to DDFI's goodwill and to DDFI's entire franchise system. (Hobab Decl.,1[23.)
25
True and correct photographs of the Signage posted at the Figarden Restaurant and at the Milburn
26
ooE,"
Restaurant are attached as Exhibits'oD" and to the Hobab Decl.;
27
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1 (b) Purposefully displaying the Signage in the Restaurants for the purpose of
2 injuring and prejudicing the goodwill associated with DDFI;
a
J (c) Refusing to purchase bread from D.D.'s Bakery (Hobab Decl., n2Ð;
4 (d) Refusing to use DDFl-approved bread products in the Restaurants (Hobab
5 Decl., n2Ð;
6 (e) Using bread products acquired from a non-DDFI approved vendor in the
7 Restaurants (Hobab Decl., n2Ð;
8 (Ð Failing to display the required digital menu boards in the Restaurants, to wit,
9 menu boards comprised of the following components to be purchased from Technology Solutions
l0 of Fresno, Inc.: ceiling mounted W Box Technologies 43" LED 4K Commercial Display; signage
11 player - Android- 4K; 3-TV menu mounting display - ceiling mount/truss bolted; 6 outlet surge
12 protector (Hobab Decl., \24-25; Ex. "F"); and
13 (g) Failing to use the designated packaging materials for sandwiches. (Hobab
T4 Decl.,'l|f 25, Ex. ooF;" Declaration of Jorge Ramirez in Support of Ex Parte Application, fl 7-8, Ex.
15
ttA" and
t'B").
T6 IV. DISCLOSUREOF'PREVIOUSPETITIONS
l7 DDFI has not previously filed an ex parte application for the relief requested herein.
l8 V. COMPLIANCE WITH NOTIFICATION REOUIREMENTS
T9 Before 10:00 a.m. on February 9,202I, counsel for DDFI arranged for Franchisee
20 to be personally served with, among other documents relating to this lawsuit, notice of this ex parte
2I application, and attempted to so notify Mr. Ty Iftaraz| whom DDFI believes may be Franchisee's
22 attorney, as a courtesy. (Declaration of David Schneider in support of Ex Parte Application n 4-7,
23 Ex. otAt'- otc.tt)
24 VI. ARGUMENT
25 Much of the success of DDFI, as with any franchised system, comes from the ability
26 for customers to obtain the same product and experience regardless of location. (Hobab Decl., tf
27 20.) For this reason, the Franchise Agreements do not permit Franchisee to use unapproved
28
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1 ingredients or products, to alter the menu items, or to use non-conforming menu boards, signage or
2 packaging materials. (Hobab Decl., n20.)
a
J DDFI implores the Court to issue injunctive relief because it is necessary for DDFI
4 to maintain the uniformity and consistency that is crucial to its franchise system and to protect it
5 from the irreparable harm it is continuing to suffer as a result of Franchisee's posting of disparaging
6 and injurious signage within the Restaurants.
7 A. Franchisee Has Breached The Franchise Agreements In Multiple Material Ways.
I "A cause of action for damages for breach of contract is comprised of the following
9 elements: (1) the contract, (2) plaintiffs performance or excuse for nonperformance, (3) defendant's
10 breach, and (a) the resulting damages to plaintiff." (Careau & Co. v. Security Pacffic Business
11 Credit, Inc. (1990) 222 Cal.App.3d 1371, 1388.) Understanding the plain language of the
t2 agreement is an important aspect of contract interpretation. Plain and unambiguous language of a
13 contract should be followed by the court. (Rosen v. State Farm Generol Ins. Co. (2003) 30 Cal.4th
r4 1070,1073 ["By failing to apply the plain, unambiguous language of the policy, the Court of Appeal
15 erred."]). The California Supreme Court has invoked plain language as the goveming rule of
T6 contract law numerous times before. (Palmer v. Truck Ins. Exchange (1999) 2l Cal.4th 1 109, 1 I 15
l7 [when language "is clear and explicit, itgoverns"]; see also Bank of the West v. Superior Court,
18 (1992) 2 Cal.4th 1254, 1264.)
T9 Here, DDFI and Franchisee formed valid, binding and specifically enforceable, non-
20 personal services contracts (i.e., the Franchisee Agreements) and DDFI is performing its
2I obligations on those contracts. Franchisee is in continuous breach of his obligations under the
22 Franchise Agreements to refrain from posting non-DDFl-approved signage in the Restaurants, to
23 refrain from taking any action that is injurious or prejudicial to DDFI's goodwill, to purchase and
24 only use bread purchased from D.D.'s Bakery in the Restaurants, to use the required digital menu
25 boards in the Restaurants, and to use the DDFl-approved packaging materials for sandwiches. As
26 a proximate result of Franchisee's breaches, DDFI is suffering irreparable harm and has no
27 adequate legal remedy.
28
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1 B. The Grant Of Injunctive Relief Is Required Because Franchiseens Continued Breaches
Of The Franchise Agreements Are Irreparably Harming DDFI.
2
J l. Legal Standards
4 a. Ex Parte & Iniunctive Relief
5 Ex parte relief is appropriate where there is a threat of irreparable harm, immediate
6 danger, or some other statutory basis for such relief. (CRC 3.1202(c).) The purpose of a temporary
7 restraining order is to preserve the status quo, or prevent irreparable harm pending the hearing of
8 an application for preliminary injunction. (Weil & Brown, CAL. PRAC. GUIDE: CIV. PRO.
9 BEFORE TRIAL (The Rutter Group 2000), at $ 9:538.)
10 A preliminary injunction may be granted at ooany time before judgment upon a
11 complaint." Appropriate grounds for a preliminary injunction include where: (1) "a party to the
t2 action is doing, . . . or about to do, . . . some act in violation of the rights of another party to the
13 action respecting the subject of the action," (2) *it appears by the complaint or affidavits that the
t4 commission or continuance of some act during the litigation would produce . . . great or irreparable
15 injury, to aparty to the action," or (3) the remedy at law is inadequate. (CCP $$ 526 and527;
T6 Lenardv. Edmonds (1957) 151 Cal.App.2d764;Rossl v. .l?ossl (1955) 134 Cal.App.2d639; Díngley
t7 v. Buclmer (1909) 11 Cal.App. 181.)
18 In addition, the Court must evaluate two interrelated factors: (1) "the likelihood that
I9 the plaintiff will prevail on the merits" and (2) "the relative balance of harms that is likely to result
20 from the granting or denial of interim injunctive relief." (1.7. Corp. v. County of Imperial (1983)
2t 35 Cal.3d 63,69-70; Jay Bharat Developers, Inc. v. Minidis (2008) 167 Cal.App.4th 437,438;
22 Heckmannv. Ahmanson (1955) 168 Cal.App.3d 1t9,125.) The second factor involves considering
23 the inadequacy of other remedies, the degree of irreparable harm, and the necessity of preserving
24 the status quo. (Moorpark Homeowner's Assn. v. VRT Corp. (1998) 63 Cal. App. 4th 1396,1402;
25 Abrams v. St. John's Hospital & Health Center (1994) 25 Cal. App. 4th 628, 636.) By balancing
26 the respective equities, the trial court should conclude whether or not to grant an injunction that
27 restrains defendant's rights pending the trial. (Pro-Family Advocates v. Gomez (1996) 46 Cal. App.
28
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1 4th 167 4, 1 63 1 .) The more likely that the applicant will ultimately prevail, the less severe the harm
2 that must be shown. (King v. Meese (1987) 43 Cal.3d 1217,1227.)
J ii. Good Cause Exists For The Court To Grant This Application.
4
Franchis his
5
^.
6
7 At the time Franchisee entered into the Franchise Agreements he was aware that his
8 performance of his obligations under the Agreements was critical to protect DDFI, and as such, he
9 agreed that DDFI may seek to enjoin and restrain him from violating the Agreements. Specifically,
10 Section XIX of the Franchise Agreements provides, in pertinent part:
*F. In addition to all other
11
remedies and damages to which it is entitled,
t2 Trademarks,
13
deems