ELGIN, Ill. (January 11, 2005) - The United States District Court for the Central District of Illinois ruled in favor of Jimmy John's Franchise Inc. and Jimmy John's Enterprises Inc. in a lawsuit against two former franchisees. The court, which ruled that the former franchisees violated franchise covenants and the Illinois Trade Secrets Act, awarded Jimmy John's a total of $1.2 million in damages.

According to the company's founder and CEO, Jimmy John Liautaud, "We will continue to pursue anybody who violates our franchise covenants, trade secrets or anything for that matter that is ours. We have mastered the art of this niche, and we appreciate the respect the United States Government has for little guys like us. God bless the U.S. court system."

The Elgin, Ill.-based Jimmy John's filed the suit in December 2003 against two former franchisees, Robert Otey and Jack Brinson, after they opened a sandwich shop known as Mama's Deli and Delivery in Greencastle, Ind. Jimmy John's sued Otey and Brinson for breaking a franchise covenant that prohibited them from owning any business engaged in selling food similar to that of Jimmy John's and for violating trade secrets.
In April of 2004, the U.S District Court entered a default judgment against Otey and Brinson, who were permanently enjoined from operating a retail restaurant promoting or selling prepared food product or any other business that sells or offers to sell prepared food products similar to Jimmy John's. The defendants were also barred from using or disclosing any proprietary or confidential information obtained from Jimmy John's Inc.

During a bench trial in November, the court established that as a result of the contract breach and misappropriation of information, Jimmy John's was unable to open a franchise in Greencastle, Ind. The U.S. District Court entered a judgment against the defendants for $314,523 in compensatory damages, and in December the court subsequently awarded Jimmy John's an additional $943,569 in punitive damages, plus $25,798.84 in attorneys' fees and costs, for a total judgment in the amount of $1,283,890.84.

Jimmy John's was represented by Kaplan Papadakis & Gournis, LLP in Chicago.

Jimmy John's Gourmet Sandwich Shops was founded in 1983 by 19-year-old Jimmy John Liautaud in a converted garage in Charleston, Ill. In just 22 years, the company has grown to more than 280 corporate and franchised locations in more than 27 states and two countries. The company is known for its obsession with fresh, quality products and high-speed execution. For more information,

Source: jimmyjohns