The Ninth Circuit recently considered the enforceability of non-competition covenants contained in franchise-like agreements. (Comedy Clubs, Inc. v. Improv West Associates (9th Cir. January 29, 2009; WL 205046.)
The plaintiff Comedy Club, Inc. (“CCI”) entered into a trademark license with Improv West Associates (“IMPROV”). CCI owned and operated restaurants and comedy clubs across the nation. The license agreement provided that IMPROV granted CCI an exclusive nationwide license to use the IMPROV marks; that CCI would open four IMPROV clubs a year in 2001 through 2003; and CCI would not operate any non-IMPROV clubs during the term of the license.