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COURT WATCH

By Susan H. Morton and David W. Oppenheim
September 11, 2003

Franchisees' Link to Pornographic Site Not Grounds for Termination

The U.S. District Court for the Northern District of Florida has granted a motion for summary judgment brought by two franchisees against their franchisor's claim that they committed breach of contract because their Web site linked to a site with hardcore pornography and gambling materials. The court also refused to enjoin the franchisees from using the franchisor's marks. Voice-Tel Enterprises, Inc. v. Joba, Inc., F.Supp. 2d, CCH Bus. Fran. Guide Par. 12,564 (N.D.Ga. 2003).

Voice-Tel, a messaging service franchisor, began the action by seeking a declaratory judgment that it was entitled to terminate the franchisees' franchise agreements and equitable relief to enjoin the franchisees from using the Voice-Tel marks. The parties subsequently added many other claims and counterclaims, but this summary will be limited to the rulings concerning the franchisees' Web site.

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