Case 1:22-cv-04376-KMW-EAP Document 1 Filed 06/30/22 Page 1 of 18 PageID: 1
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`IN THE UNITED STATES DISTRICT COURT
`FOR THE DISTRICT OF NEW JERSEY—CAMDEN DIVISION
`
`DUNKIN’ DONUTS FRANCHISING LLC,
`DUNKIN’ DONUTS FRANCHISED
`RESTAURANTS LLC, DD IP HOLDER,
`LLC, and
`DUNKIN’ BRANDS, INC.,
`each a Delaware limited liability company,
`
`Plaintiffs,
`
`v.
`
`VICKY AND BONNY COFFEE EXPRESS
`SOMERDALE LLC,
`VICKY AND BONNY COFFEE EXPRESS
`TURNERSVILLE LLC,
`VICKY AND BONNY COFFEE EXPRESS
`SEWELL LLC,
`VICKY AND BONNY COFFEE EXPRESS
`WILLIAMSTOWN LLC,
`VICKY AND BONNY COFFEE EXPRESS EGG
`HARBOR LLC,
`VICKY AND BONNY COFFEE EXPRESS
`WINSLOW LLC,
`VICKY AND BONNY COFFEE EXPRESS
`TURNERSVILLE NORTH LLC, and
`VICKY AND BONNY COFFEE EXPRESS
`GIBBSTOWN LLC,
`
`each a New Jersey limited liability company;
`
`VICKY AND BONNY COFFEE EXPRESS
`SICKLERVILLE, INC. and
`VICKY AND BONNY OF PINE HILL, INC.,
`
`each a New Jersey corporation;
`
`and
`
`VICKY & BONNY OF AVONDALE PA LLC,
`each a Pennsylvania limited liability
`company; and
`
`SAILESH PATEL,
`PARESH K. PATEL,
`CHANDRAKANT M. PATEL,
`SAMIR PATEL,
`SUMIT PATEL,
`
`Case No. _______________
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`

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`Case 1:22-cv-04376-KMW-EAP Document 1 Filed 06/30/22 Page 2 of 18 PageID: 2
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`NISH PAREKH, and
`PRAFUL VAID,
`each a New Jersey citizen;
`
`
`Defendants.
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`
`
`
`
`
`
`COMPLAINT FOR INJUNCTIVE RELIEF
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`This is an action to enforce a settlement agreement executed between Plaintiffs and
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`Defendants. Plaintiffs Dunkin’ Donuts Franchising LLC, Dunkin’ Donuts Franchised Restaurants
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`LLC, DD IP Holder LLC, and Dunkin’ Brands, Inc. (collectively, “Dunkin’”) entered into a
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`settlement agreement on February 2, 2022 with Defendants Vicky and Bonny Coffee Express
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`Somerdale LLC; Vicky and Bonny Coffee Express Turnersville LLC; Vicky and Bonny Coffee
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`Express Sewell LLC; Vicky and Bonny Coffee Express Williamstown LLC; Vicky and Bonny
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`Coffee Express Sicklerville, Inc.; Vicky & Bonny of Avondale PA LLC; Vicky and Bonny of Pine
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`Hill, Inc.; Vicky and Bonny Coffee Express Egg Harbor LLC; Vicky and Bonny Coffee Express
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`Winslow LLC; Vicky and Bonny Coffee Express Turnersville North LLC; and Vicky and Bonny
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`Coffee Express Gibbstown LLC (together, the “Franchisee Defendants”), and Sailesh Patel; Paresh
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`K. Patel; Chandrakant M. Patel; Samir Patel; Sumit Patel; Praful Vaid; and Nish Parekh (the
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`“Settlement Agreement”). Under the Settlement Agreement, the Defendants agreed, among other
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`things, to identify a buyer or buyers for their franchise(s), deliver to Dunkin’ an executed Asset
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`Purchase Agreement, and close on the sale of the franchise(s), in exchange for, among other things,
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`a release by Dunkin’ of all claims it had brought against the Defendants. The Defendants further
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`agreed that, should they fail to deliver an Asset Purchase Agreement and close on the sale of the
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`franchises by the deadlines set forth in the Settlement Agreement, they would consent to the
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`termination of the Franchise Agreements.
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`The Settlement Agreement resolved a lawsuit filed by Dunkin’ against the Defendants
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`alleging breaches of the Franchise Agreement and other claims. Before filing suit, Dunkin’
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`determined that the Defendants had committed significant violations of federal law by, among
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`other things, failing to verify whether employees at the restaurants were authorized to work in the
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`United States, failing to complete and retain required records relating to work authorization, and
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`providing false information to the U.S. government. They also committed fraud in attempting to
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`cover up these violations. These and other documented violations constitute breaches of the
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`Franchise Agreements and caused harm to Dunkin’ and the Dunkin’ Marks. Consequently,
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`Dunkin’ terminated the Franchise Agreements and sued the Defendants for their various breaches
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`of their respective Franchise Agreements. Dunkin’ settled with the Defendants and the settlement
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`terms are enumerated in the Settlement Agreement. The Defendants have failed to comply with
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`their obligations under the Settlement Agreement, including their obligation to submit Asset
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`Purchase Agreements and close on the sale of the franchises. Dunkin’ now seeks immediate and
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`permanent injunctive relief and attorneys’ fees and costs, as discussed below.
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`The Parties
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`1.
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`Plaintiff Dunkin’ Donuts Franchising LLC (“Dunkin’ Franchising”) is a Delaware
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`limited liability company with its principal place of business in Canton, Massachusetts. The sole
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`member of Dunkin’ Franchising is DB Franchising Holding Company, LLC, whose sole member
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`is DB Master Finance, LLC, whose sole member is Baskin-Robbins International LLC, whose sole
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`member is Baskin-Robbins Flavors, LLC, whose sole member is Baskin-Robbins USA, LLC,
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`whose sole member is Baskin-Robbins, LLC, whose sole member is Mister Donut of America,
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`LLC, whose sole member is Dunkin’ Donuts USA, LLC, whose sole member is Dunkin’ Donuts,
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`LLC. Baskin-Robbins USA, LLC is a California limited liability company; each remaining entity
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`listed above is a Delaware limited liability company. The sole member of Dunkin’ Donuts, LLC
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`is Dunkin’ Brands, Inc., a Delaware corporation with its principal place of business in Canton,
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`Massachusetts.
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`2.
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`Plaintiff Dunkin’ Donuts Franchised Restaurants LLC is also a Delaware limited
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`liability company with its principal place of business in Canton, Massachusetts. The sole member
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`of Dunkin’ Donuts Franchised Restaurants is DB Master Finance LLC, whose ownership is
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`provided above.
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`3.
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`Dunkin’ Franchising is engaged (and, prior to 2007, Dunkin’ Donuts Franchised
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`Restaurants was engaged) in the business of franchising independent businesspersons to operate
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`Dunkin’ restaurants throughout the United States. Dunkin’ franchisees are licensed to use the
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`tradenames, service marks, and trademarks of Dunkin’ and to operate under the Dunkin’ System,
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`which involves the production, merchandising, and sale of doughnuts, coffee, and related products
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`utilizing specially designed buildings with special equipment, equipment layouts, interior and
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`exterior accessories, identification schemes, products, standards, specifications, proprietary marks,
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`and identification.
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`4.
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`Plaintiff DD IP Holder LLC, successor in interest to Dunkin’ Donuts USA, Inc., is
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`a Delaware limited liability company with its principal place of business in Canton, Massachusetts.
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`Its sole member is DB Master Finance, LLC, whose ownership is provided above. DD IP Holder
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`LLC is the owner of the trademark, service mark, and tradename “Dunkin’” and related marks.
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`5.
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`Dunkin’ Brands, Inc., is a Delaware corporation with its principal place of business
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`in Canton, Massachusetts. Unless stated otherwise, Plaintiffs Dunkin’ Franchising, Dunkin’
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`Donuts Franchised Restaurants, and DD IP Holder LLC are referred to collectively as “Dunkin’”.
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`6.
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`Defendant Vicky and Bonny Coffee Express Somerdale LLC (“Somerdale”) is a
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`New Jersey limited liability company whose members are Chandrakant M. Patel, Paresh K. Patel,
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`Sailesh Patel, Samir Patel, and Sumit Patel, each a New Jersey citizen. Somerdale operated a
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`Dunkin’ restaurant located at 150 South White Horse Pike, Somerdale, New Jersey, pursuant to a
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`Franchise Agreement it entered into with Dunkin’ Franchising dated November 16, 2020. A true
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`copy of the Franchise Agreement for this restaurant is attached to this Complaint as Exhibit 1.
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`7.
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`Defendant Vicky and Bonny Coffee Express Turnersville LLC (“Turnersville”) is
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`a New Jersey limited liability company whose members are Chandrakant M. Patel, Paresh K. Patel,
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`Sailesh Patel, Samir Patel, and Sumit Patel, each a New Jersey citizen. Turnersville operated a
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`Dunkin’ restaurant located at 5751 Route 42 South, Turnersville, New Jersey, pursuant to a
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`Franchise Agreement it entered into with Dunkin’ Franchising dated August 17, 2019. The
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`relevant terms and conditions contained in this Franchise Agreement are substantially similar to
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`those in Exhibit 1.
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`8.
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`Defendant Vicky and Bonny Coffee Express Sewell LLC (“Sewell”) is a New
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`Jersey limited liability company whose members are Chandrakant M. Patel, Paresh K. Patel,
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`Sailesh Patel, Samir Patel, and Sumit Patel, each a New Jersey citizen. Sewell operated a Dunkin’
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`restaurant located at 1551 Hurffville Road, Sewell, New Jersey, pursuant to a Franchise Agreement
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`it entered into with Dunkin’ Franchising dated July 24, 2020. The relevant terms and conditions
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`contained in this Franchise Agreement are substantially similar to those in Exhibit 1.
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`9.
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`Defendant Vicky and Bonny Coffee Express Williamstown LLC (“Williamstown”)
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`is a New Jersey limited liability company whose members are Chandrakant M. Patel, Paresh K.
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`Patel, Sailesh Patel, Samir Patel, and Sumit Patel, each a New Jersey citizen. Williamstown
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`operated a Dunkin’ restaurant located at 50 South Black Horse Pike, Williamstown, New Jersey,
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`pursuant to a Franchise Agreement it entered into with Dunkin’ Franchising dated August 17,
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`2009. The relevant terms and conditions contained in this Franchise Agreement are substantially
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`similar to those in Exhibit 1.
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`10.
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`Defendant Vicky and Bonny Coffee Express Sicklerville, Inc. (“Sicklerville”) is a
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`New Jersey corporation whose principal place of business is located at 2801 Route 42,
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`Turnersville, New Jersey. At that location, it operated a Dunkin’ restaurant pursuant to a Franchise
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`Agreement it entered into with Dunkin’ Franchising dated February 26, 2007. The relevant terms
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`and conditions contained in this Franchise Agreement are substantially similar to those in Exhibit
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`1. Sicklerville’s owners are Paresh K. Patel and Sailesh Patel.
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`11.
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`Defendant Vicky & Bonny of Avondale PA LLC (“Avondale”) is a Pennsylvania
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`limited liability company whose members are Paresh K. Patel, Nish Parekh, Praful Vaid, and
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`Sailesh Patel, each a New Jersey citizen. Avondale operated a Dunkin’ restaurant located at 81
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`Baltimore Pike, Avondale, Pennsylvania, pursuant to a Franchise Agreement it entered into with
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`Dunkin’ Franchising dated April 18, 2011. The relevant terms and conditions contained in this
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`Franchise Agreement are substantially similar to those in Exhibit 1.
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`12.
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`Defendant Vicky and Bonny of Pine Hill, Inc. (“Pine Hill”) is a New Jersey
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`corporation whose principal place of business is located at 111 Cross Keys Road, Berlin, New
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`Jersey. At that location, it operated a Dunkin’ restaurant pursuant to a Franchise Agreement it
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`entered into with Dunkin’ Donuts Franchised Restaurants dated March 2, 2006. The relevant terms
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`and conditions contained in this Franchise Agreement are substantially similar to those in Exhibit
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`1. Pine Hill’s owners are Paresh K. Patel and Sailesh Patel.
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`13.
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`Defendant Vicky and Bonny Coffee Express Egg Harbor LLC (“Egg Harbor”) is a
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`New Jersey limited liability company whose members are Chandrakant M. Patel, Paresh K. Patel,
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`Sailesh Patel, Samir Patel, and Sumit Patel, each a New Jersey citizen. Egg Harbor operated a
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`Dunkin’ restaurant located at 300 Egg Harbor Road, Sewell, New Jersey, pursuant to a Franchise
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`Agreement it entered into with Dunkin’ Franchising dated August 17, 2009. The relevant terms
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`and conditions contained in this Franchise Agreement are substantially similar to those in Exhibit
`
`1.
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`14.
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`Defendant Vicky and Bonny Coffee Express Winslow LLC (“Winslow”) is a New
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`Jersey limited liability company whose members are Chandrakant M. Patel, Paresh K. Patel,
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`Sailesh Patel, Samir Patel, and Sumit Patel, each a New Jersey citizen. Winslow operated a
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`Dunkin’ restaurant located at 334 Sicklerville Road, Sicklerville, New Jersey, pursuant to a
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`Franchise Agreement it entered into with Dunkin’ Franchising dated August 17, 2009. The
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`relevant terms and conditions contained in this Franchise Agreement are substantially similar to
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`those in Exhibit 1.
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`15.
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`Defendant Vicky and Bonny Coffee Express Turnersville North LLC
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`(“Turnersville North”) is a New Jersey limited liability company whose members are Chandrakant
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`M. Patel, Paresh K. Patel, Sailesh Patel, Samir Patel, and Sumit Patel, each a New Jersey citizen.
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`Turnersville North operated a Dunkin’ restaurant located at 5400 Route 42, Turnersville, New
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`Jersey, pursuant to a Franchise Agreement it entered into with Dunkin’ Franchising dated May 25,
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`2011. The relevant terms and conditions contained in this Franchise Agreement are substantially
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`similar to those in Exhibit 1.
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`16.
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`Defendant Vicky and Bonny Coffee Express Gibbstown LLC (“Gibbstown”) is a
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`New Jersey limited liability company whose members are Chandrakant M. Patel, Paresh K. Patel,
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`Sailesh Patel, Samir Patel, and Sumit Patel, each a New Jersey citizen. Gibbstown operated a
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`Dunkin’ restaurant located at 431 Harmony Road, Gibbstown, New Jersey, pursuant to a Franchise
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`Agreement it entered into with Dunkin’ Franchising dated February 1, 2014. The relevant terms
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`and conditions contained in this Franchise Agreement are substantially similar to those in Exhibit
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`1.
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`17.
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`Defendant Sailesh Patel is a natural person. He guaranteed the obligations of each
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`of the Franchisee Defendants under their Franchise Agreements. He further agreed that the
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`Franchise Agreements would be binding upon him personally.
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`18.
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`Defendant Paresh K. Patel is a natural person. He guaranteed the obligations of
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`each of the Franchisee Defendants under their Franchise Agreements. He further agreed that the
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`Franchise Agreements would be binding upon him personally.
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`19.
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`Defendant Chandrakant M. Patel is a natural person. He guaranteed the obligations
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`of Somerdale, Turnersville, Sewell, Williamstown, Egg Harbor, Winslow, Turnersville North, and
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`Gibbstown under their Franchise Agreements. He further agreed that those Franchise Agreements
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`would be binding upon him personally.
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`20.
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`Defendant Samir Patel is a natural person. He guaranteed the obligations of
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`Somerdale, Turnersville, Sewell, Williamstown, Egg Harbor, Winslow, Turnersville North, and
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`Gibbstown under their Franchise Agreements. He further agreed that those Franchise Agreements
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`would be binding upon him personally.
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`21.
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`Defendant Sumit Patel is a natural person. He guaranteed the obligations of
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`Somerdale, Turnersville, Sewell, Williamstown, Egg Harbor, Winslow, Turnersville North, and
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`Gibbstown under their Franchise Agreements. He further agreed that those Franchise Agreements
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`would be binding upon him personally.
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`22.
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`Defendant Nish Parekh is a natural person. He guaranteed the obligations of
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`Avondale under its Franchise Agreement. He further agreed that this Franchise Agreement would
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`be binding upon him personally.
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`23.
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`Defendant Praful Vaid is a natural person. He guaranteed the obligations of
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`Avondale under its Franchise Agreement. He further agreed that this Franchise Agreement would
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`be binding upon him personally.
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`Jurisdiction
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`24.
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`This Court has jurisdiction pursuant to sections 34(a) and 39 of the Lanham Act,
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`15 U.S.C. §§ 1116(a) and 1121, and 28 U.S.C. §§ 1331, 1332, 1338, and 1367. In addition, no
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`Plaintiff shares the citizenship of any Defendant, and the amount in controversy exceeds $75,000.
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`25.
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`This Court has in personam jurisdiction over Defendants because they conduct
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`business and have caused injury in this District.
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`26.
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`Venue is proper in this District pursuant to 28 U.S.C. § 1391(b) because a
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`substantial part of the events and omissions giving rise to the claims herein occurred in this District.
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`Background Facts
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`The Dunkin’ System and the Dunkin’ Marks
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`27.
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`Dunkin’ Franchising is (and, prior to 2007, Dunkin’ Donuts Franchised Restaurants
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`was) the franchisor of the Dunkin’ System for franchised restaurants.
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`28.
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`DD IP Holder LLC is the owner of the Dunkin’ Marks. Dunkin’ Franchising has
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`the exclusive license to use and license others to use the Dunkin’ Marks and, along with its
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`predecessors, has used them continuously since approximately 1960 to identify its restaurants and
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`the doughnuts, pastries, coffee, and other products associated with those restaurants.
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`29.
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`DD IP Holder LLC owns numerous federal registrations for the marks “Dunkin’”,
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`“Dunkin’ Donuts” and related marks. Among those are Registration Nos. 748,901; 1,148,165;
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`1,159,354; 3,328,278; and 4,290,078. Each of these registrations is in full force and effect and is
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`incontestable pursuant to 15 U.S.C. § 1065.
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`30.
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`The Dunkin’ Marks and tradenames have been widely and continuously used in
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`interstate commerce for decades in connection with restaurants and the doughnuts, pastries, coffee,
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`and other products associated with these restaurants.
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`31.
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`The Dunkin’ Marks and tradenames are inherently distinctive. Additionally, they
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`have been extensively used, promoted, and advertised, and thus are distinctive and famous
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`indicators of Dunkin’ and its properly licensed franchisees as sources of high-quality goods and
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`services, generating valuable goodwill for Dunkin’.
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`32.
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`The Dunkin’ Marks have been widely advertised and promoted by Dunkin’ over
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`the years. Between 1971 and 2019, Dunkin’ and its franchisees spent over $5 billion on advertising
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`and promoting the Dunkin’ Marks. Dunkin’ spent approximately $470 million in 2019 alone on
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`advertising and promotion.
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`33.
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`Dunkin’ franchisees currently operate over 9,000 Dunkin’ restaurants in the United
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`States and over 3,000 restaurants internationally. Dunkin’ restaurants feature the distinctive
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`Dunkin’ trade dress, including the pink and orange color scheme, and the frankfurter lettering
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`style. In the more than sixty years since the Dunkin’ Franchise System began, hundreds of millions
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`of consumers have been served in Dunkin’ restaurants.
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`34.
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`As a result of the extensive sales, advertising, and promotion of items identified by
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`the Dunkin’ Marks, the public has come to know and recognize the Dunkin’ Marks, and to
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`associate them exclusively with products and services offered by Dunkin’ franchisees. The
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`Dunkin’ Marks are famous. They are among the best and most widely known and recognized
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`trademarks in the United States today, and are assets of inestimable value to Dunkin’, representing
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`and embodying Dunkin’s considerable goodwill and favorable reputation.
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`35.
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`The goodwill and reputation associated with the Dunkin’ Marks are harmed or
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`subject to being harmed when a franchisee operates a Dunkin’ franchise contrary to the standards
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`and requirements established by the franchise agreement, including the obligation to obey all laws
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`in the operation of the business.
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`The Prior Action
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`36.
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`The Defendants, collectively, owned and operated the ten franchises in New Jersey
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`and one franchise in Pennsylvania (individually referenced as, “Franchise” or collectively, the
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`“Franchises”) that form the basis for this action.
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`37.
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`Under the terms of the Franchise Agreements,1 the Defendants agreed that they
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`would comply with all civil and criminal laws, ordinances, rules, regulations, and orders of public
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`authorities pertaining to the operation of the restaurants. (Franchise Agreements § 7.1.)
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`38.
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`The Defendants agreed to operate their franchised businesses in accordance with
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`all of Dunkin’s Brand Standards and agreed not to perform any act injurious or prejudicial to the
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`goodwill associated with the Dunkin’ Marks and System. (Id. § 7.0, § 10.1.) The Defendants
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`agreed to keep and maintain the business records of the franchise as required by law and in a form
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`and manner as Dunkin’ may mandate, and agreed to make available and produce each franchise’s
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`books and records to Dunkin’. (Id. § 11.0, § 11.2.)
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`39.
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`Pursuant to the Franchise Agreements, and per various letters, Dunkin’ requested
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`that the Defendants produce for Dunkin’s review certain employment, tax, and other records dating
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`back to January 2018.
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`40.
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`The Defendants provided documents and Dunkin’s review revealed pervasive and
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`1 As noted previously, the Franchise Agreements under which the Franchisee Defendants operate
`are substantially similar, although the numbering of particular provisions varies from one
`Agreement to the next. The references cited are to sections of the Somerdale Franchise Agreement.
`The franchise agreements are collectively referred to as the “Franchise Agreements.”
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`substantial noncompliance by the Defendants with Federal law, constituting violations of the
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`“Obey All Laws” provision contained in section 7.1 of the Franchise Agreements.
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`41.
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`The Defendants also violated additional provisions of the Franchise Agreements by
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`failing to verify whether employees at the restaurants were authorized to work in the United States,
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`failing to complete and retain required records relating to work authorization, and providing false
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`information to the U.S. government. Their actions were injurious or prejudicial to the goodwill
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`associated with the Dunkin’ Marks and System, in violation of section 10.1 of the Franchise
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`Agreements.
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`42.
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`In conducting their franchised businesses contrary to federal and state law, and in
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`failing to follow required processes for hiring and employment eligibility verification, payroll, and
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`taxation, Defendants used the franchised businesses for an unauthorized purpose, in violation of
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`section 14.0.5 of the Franchise Agreements.
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`43.
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`On September 28, 2021, Dunkin’ Donuts Franchising LLC, Dunkin’ Donuts
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`Franchised Restaurants LLC and DD IP Holder LLC filed a Complaint against the Defendants in
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`the United States District Court for the District of New Jersey in the action captioned Dunkin
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`Donuts Franchising LLC, et al. v. Vicky and Bonny Coffee Express Somerdale LLC, et. al., Civil
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`Action No. 21-cv-17719 (the “Prior Action”).
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`44.
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`In the Prior Action, Dunkin’ asserted claims for various breaches of contract,
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`declaratory relief, dilution by tarnishment of famous marks, trademark infringement, and trade
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`dress infringement based upon the conduct described in the preceding paragraphs.
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`45. While the Prior Action was pending, the parties reached a settlement and
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`memorialized the terms in a Settlement Agreement.
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`46.
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`Section 4 of the Settlement Agreement provides:
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`“THE FRANCHISEES shall, on or before March 31, 2022, submit to
`DUNKIN’ fully executed Asset Purchase Agreement(s), including completed
`Rider(s) to Contract for Sale (along with all supporting documentation), to
`transfer the Franchises (the “APA Submission Date”). Both the APA(s) and
`the prospective transferee(s) are subject to DUNKIN’s review and approval,
`which will not be unreasonably withheld. . . .
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`Subject to the limited exception herein contained, the FRANCHISEES must
`close the sale and transfer of the Franchises within sixty (60) days of
`DUNKIN’s written approval of the APA(s) (referred to in this Section as the
`“Closing Date”). . . .
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`Time is of the essence.
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`
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`47.
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`None of the Defendants provided Dunkin’ with fully executed Asset Purchase
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`Agreements by March 31, 2022.
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`48.
`
`Section 5 of the Settlement Agreement provides:
`
`“The FRANCHISEES shall execute separately with this Agreement
`DUNKIN’s standard form Franchise Termination and Surrender Agreement
`and Release (attached as Exhibit B) for each of the Franchises, to be held by
`counsel for DUNKIN’. Upon the occurrence of any of the following: (a) a
`default of any of the terms of this Agreement, (b) the FRANCHISEES’
`failure to submit APA Agreement(s) for the transfer of the Franchises
`pursuant to Section 4 of this Agreement or Dunkin’s disapproval of the same;
`or (c) the failure to close on the sale of any of the Franchises, and after
`providing seven (7) business days’ notice to FRANCHISEES, Dunkin’ is
`authorized to date and counter-sign the Franchise Termination and Surrender
`Agreement and Release form for each unsold Franchise. Upon [sic] Dunkin’s
`counter-signing of a Franchise Termination and Surrender Agreement and
`Release form (hereinafter “Termination Agreement”) pursuant to this
`Section,
`the FRANCHISEES shall
`immediately comply with
`their
`obligations pursuant to Section 6 of this Agreement with regard to that
`particular Franchise.”
`
`49.
`
`Pursuant to sections 4 and 5 of the Settlement Agreement, on June 15, 2022,
`
`Dunkin’ sent Defendants a Notice of Failure to Submit Asset Purchase Agreements (the “Notice”).
`
`A true copy of the letter is attached to this Complaint as Exhibit 2.
`
`50.
`
` The Notice notified the Defendants that they failed to provide fully executed Asset
`
`Purchase Agreements for the sale of the franchises by the deadline of March 31, 2022. (Ex. 2.)
`
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`Case 1:22-cv-04376-KMW-EAP Document 1 Filed 06/30/22 Page 14 of 18 PageID: 14
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`51.
`
`52.
`
`The 7 business days’ notice period ended on June 28, 2022.
`
`On June 29, 2022 Dunkin’ countersigned the Termination Agreements that were
`
`signed by the Defendants. Dunkin’ notified the Defendants that it signed the Termination
`
`Agreements the same day. A true and correct copy of the Termination Agreements is attached to
`
`this Complaint as Exhibit 3.
`
`53.
`
`In accordance with section 5 of the Settlement Agreement, Dunkin’ was authorized
`
`to date and countersign the Termination Agreements after providing 7 business days’ written
`
`notice to the Defendants because the Defendants have:
`
`a. Failed to submit Asset Purchase Agreements for the transfer of the Franchise by
`
`the deadline pursuant to Section 4 of the Settlement Agreement; and
`
`b. Failed to close on the sale of the Franchises.
`
`54.
`
`On June 21, 2022, after they received the June 15, 2022 notice from Dunkin’,
`
`certain Defendants provided Dunkin’ with an executed Asset Purchase Agreement for the
`
`Avondale location.
`
`55.
`
`Section 6 of the Settlement Agreement provides that after Dunkin’ provides 7
`
`business days’ notice to the Defendants and countersigns the Termination Agreements, it may
`
`exercise its option to assume leases for the Franchises and that Defendants must assign to Dunkin’
`
`any interest which they or any one of them has in any lease or sublease for the premises, vacate
`
`the premises, and assist Dunkin’ with taking immediate possession of the premises.
`
`56.
`
`Pursuant to Section 6 paragraph c, Defendants “agree that any unauthorized use of
`
`any of DUNKIN’s methods, trademarks, trade secrets, and propriety marks after Dunkin’s
`
`countersigning of any of the Termination Agreements, the [Defendants’] assignment of the leases
`
`for the Franchise’s premises, or the Deidentification Date shall constitute irreparable harm to
`
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`Case 1:22-cv-04376-KMW-EAP Document 1 Filed 06/30/22 Page 15 of 18 PageID: 15
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`DUNKIN’, entitling DUNKIN’ to injunctive relief.”
`
`57.
`
`Section 6 of the Settlement Agreement requires Defendants to “comply with all
`
`post-termination obligations set forth in the Franchise Agreement[.]”
`
`58.
`
`The Settlement Agreement also contains a clause dedicated to remedies. The
`
`provisions provide that in the event of a material breach of the Settlement Agreement, Dunkin’
`
`may “elect either to sue under this Agreement, under the Franchise Agreement pursuant to which
`
`[Defendants] operate the Franchise, or under any other agreement between DUNKIN’ and the
`
`[Defendants], or any combination thereof.”
`
`59.
`
`The Franchise Agreements executed by the Defendants contain a provision that
`
`permits Dunkin’ to seek attorneys’ fees, costs, and expenses incurred by it in successfully
`
`enforcing any provision of the Agreement. (Ex. 1 at ¶ 14.4.4.)
`
`COUNT I
`(Breach of Contract—Failure to Deliver Executed Asset Purchase Agreement)
`
`
`
`60.
`
`61.
`
`The allegations of paragraphs 1 through 59 are hereby incorporated by reference.
`
`Defendants have violated the Settlement Agreement by failing to deliver to Dunkin’
`
`an executed Asset Purchase Agreement for each franchise in the time required by section 4 of the
`
`Settlement Agreement.
`
`62.
`
`Further, Defendants did not sell their franchises in the time required by the
`
`Settlement Agreement.
`
`63.
`
`Since the time of Dunkin’s execution of the Termination Agreements, the
`
`Defendants have continued to operate the locations and are continuing to use Dunkin’s marks and
`
`intellectual property without approval or authorization.
`
`64.
`
`The failure to execute the Asset Purchase Agreements and close on the sale of the
`
`franchises within the time limits set forth in Section 5 of the Settlement Agreement constitute
`
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`

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`Case 1:22-cv-04376-KMW-EAP Document 1 Filed 06/30/22 Page 16 of 18 PageID: 16
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`breaches of the Settlement Agreement.
`
`65.
`
`Because Defendants failed to deliver executed Asset Purchase Agreements and
`
`failed to close on the sale of the locations, Dunkin’ is entitled to terminate the Franchise
`
`Agreements.
`
`66.
`
`67.
`
`Dunkin’ has performed all of its obligations under the Settlement Agreement.
`
`As a result of Defendants’ actions, Dunkin’ has suffered and is continuing to suffer
`
`irreparable injury.
`
`COUNT II
`(Trademark Infringement)
`
`68.
`
`69.
`
`The allegations of paragraphs 1 through 67 are hereby incorporated by reference.
`
`As a result of Dunkin’s execution of the Termination Agreements, the Defendants
`
`are prohibited from operating the Franchises with Dunkin’s trademarks and trade names.
`
`70.
`
`Since the time of Dunkin’s execution of the Termination Agreements, the
`
`Defendants have continued to operate the locations and are continuing to use Dunkin’s marks and
`
`intellectual property without approval or authorization.
`
`71.
`
`Paragraph 6.c. of the Settlement Agreement provides that the Defendants “agree
`
`that any unauthorized use of any of DUNKIN’s methods, trademarks, trade secrets, and proprietary
`
`marks after Dunkin’s countersigning of any of the Termination Agreement, the [Defendants]
`
`assignment of the leases for the Franchise’s premises, or the Deidentification Date shall constitute
`
`irreparable harm to DUNKIN’, entitling DUNKIN’ to injunctive relief.”
`
`72.
`
`Defendants’ use in commerce of Dunkin’s trademarks and trade names outside the
`
`scope of the Franchise Agreements and without Dunkin’s consent is likely to confuse or deceive
`
`the public into believing, contrary to fact, that Defendants’ unauthorized activities are licensed,
`
`franchised, sponsored, authorized, or otherwise approved by Dunkin’. Such unauthorized use of
`
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`
`Dunkin’s trademarks and trade names infringes Dunkin’s exclusive rights in its trademarks under
`
`§ 32 of the Lanham Act, 15 U.S.C. § 1114, and applicable state law.
`
`73.
`
`Defendants’ acts were and are being done knowingly and intentionally to cause
`
`confusion, or to cause mistake, or to deceive.
`
`74.
`
`As a direct and proximate result of Defendants’ actions, Dunkin’ has suffered and
`
`is continuing to suffer irreparable injury.
`
`WHEREFORE, Dunkin’ requests that this Court:
`
`Prayer for Relief
`
`A.
`
`Enter an order requiring Defendants to comply with all of their post-termination
`
`obligations as set forth in the Settlement Agreement;
`
`B.
`
`Enter an order enjoining Defendants, and all those acting in concert with them, by
`
`preliminary and permanent injunction, from continuing to operate the franchises and from
`
`tarnishing the Dunkin’ Marks or using the Dunkin’ Marks, trade names, and trade dress as of the
`
`effective date of Dunkin’s execution of the Termin