District & Sessions Court, GurugramArbitration
Gurugram court restrains brand from terminating restaurant franchise pending arbitration
Interim protection under S. 9: franchisee has invested in the outlet and the agreement’s cure period was not given.
Published
00Background
The franchise agreement allows termination for breach only after a 30-day notice to cure. The brand terminated the petitioner’s franchise by a single email citing hygiene complaints.
01Submissions
For the petitioner-franchisee
No cure notice was given; losing the brand would shut an outlet built with ₹60 lakh of investment before the arbitrator can be appointed.
For the respondent-brand
Repeated complaints damage the brand. Loss, if any, can be compensated in money.
02Observations
The Court held that the petitioner had a prima facie case on the cure clause and that closure of a running outlet was not harm easily measured in money.
03Findings & directions
- Termination email not to be acted on until the next date.
- Petitioner to follow the brand’s hygiene audit and file a compliance report.
- Petitioner to invoke arbitration within 90 days, as S. 9(2) requires.
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