## Facts

- A franchisor licensed its cookie-store trademark and system to franchisees operating a mall store in Aurora, Illinois.
- The franchisor documented repeated operational and quality problems at the store and multiple alleged contract defaults, including late payments, bounced checks, failure to provide required insurance certificates, failed inspections, and underreported sales resulting in royalty underpayments found by an auditor.
- The franchise agreement permitted termination without further notice or opportunity to cure after a specified number of violations within a twelve-month period.
- The franchisor terminated the franchise; the franchisees continued operating and using the marks and trade dress, later using nonapproved dough suppliers.
- The franchisor sued for preliminary injunctive relief under the Lanham Act to stop further trademark use; the franchisees counterclaimed and sought a preliminary injunction compelling reinstatement of the franchise.
- The district court adopted a magistrate judge’s report by reference, granted the franchisees’ requested preliminary injunction, and denied the franchisor’s; the franchisor appealed.

## Issues

1. Whether an order that grants injunctive relief by incorporating a magistrate judge’s report by reference satisfies Rule 65(d)’s requirement that an injunction state, in reasonable detail and without reference to other documents, the acts restrained or required.
2. Whether a preliminary mandatory injunction compelling a franchisor to reinstate and continue a franchise relationship is proper given the preliminary-injunction factors and evidence of franchisee breach.
3. Whether, after termination, continued use of the franchisor’s marks supports preliminary injunctive relief to prevent consumer confusion and harm to goodwill.

## Decision

- The Seventh Circuit exercised appellate jurisdiction and vacated the district court’s order, remanding for further proceedings.
- The court held the injunction form was defective under Rule 65(d) because it failed to specify the required or prohibited acts and instead relied on incorporation by reference.
- The court further concluded the district court abused its discretion on the merits in granting the franchisees a mandatory preliminary injunction and denying the franchisor’s request for relief against continued trademark use.

## Legal Principles

- An injunction must be self-contained and describe in reasonable detail the conduct restrained or compelled; incorporating other documents by reference does not satisfy Rule 65(d).
- Mandatory preliminary injunctions that require ongoing affirmative performance (such as forced continued dealing) are disfavored and require a strong showing because they alter the status quo and risk ongoing judicial supervision of commercial relations.
- In trademark and franchise settings, continued use of marks after termination—especially while selling nonapproved goods—typically threatens consumer confusion and the mark owner’s goodwill and supports injunctive relief.
- In evaluating preliminary relief, courts weigh likelihood of success, irreparable harm, balance of harms, and public interest; substantial evidence of the movant’s contractual nonperformance undercuts entitlement to mandatory relief.

## Conclusion

The Seventh Circuit vacated a preliminary injunction compelling franchise reinstatement because the order lacked the specificity Rule 65(d) requires and because forcing continued licensing and business relations was unwarranted given the franchisees’ alleged breaches and the stronger case for stopping post-termination trademark use pending final adjudication.


The Original Great American Chocolate Chip Cookie Co. v. River Valley Cookies, Ltd., 970 F.2d 273 (7th Cir. 1992)