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Dayan v. Mcdonald's Corp.

OPINION FILED SEPTEMBER 18, 1978.

RAYMOND DAYAN, PLAINTIFF-APPELLEE,

v.

MCDONALD'S CORPORATION ET AL., DEFENDANTS-APPELLANTS.



APPEAL from the Circuit Court of Cook County; the Hon. GEORGE J. SCHALLER, Judge, presiding.

MR. JUSTICE MCGLOON DELIVERED THE OPINION OF THE COURT:

Plaintiff Raymond Dayan entered into an agreement with defendant McDonald's Corporation for the acquisition and operation of McDonald's restaurants in Paris, France. As part of the agreement, the parties agreed that both Illinois and France had jurisdiction to resolve disputes that should arise thereunder. Subsequently, McDonald's filed a suit in France alleging that Dayan had breached certain conditions of the agreement and sought to terminate his operating licenses. McDonald's also filed a second suit for trademark infringement. Both suits are still pending. Thereafter, Dayan filed a suit in the circuit court of Cook County seeking an injunction enjoining McDonald's from terminating the operating licenses of the French restaurants and ordering the issuance of an operating license for the restaurant involved in the trademark infringement suit. After hearing arguments, the trial court granted Dayan's motion for a preliminary injunction, pending further hearings. McDonald's appealed.

On appeal, McDonald's argues that (1) the trial court improperly granted the preliminary injunction because the matter was pending in France; (2) Dayan failed to allege grounds sufficient for the issuance of a preliminary injunction; and (3) the trial court improperly ordered a preliminary injunction by failing to first hold a hearing.

We affirm.

Plaintiff Raymond Dayan entered into a master license agreement with defendant McDonald's Corporation permitting him to acquire and operate McDonald's restaurants in Paris, France. Dayan was to follow a schedule of openings over a 30-year period at which time a minimum of 166 would be in operation. Under the agreement, operating licenses for each restaurant were to be issued as long as Dayan met McDonald's standards for quality, service and cleanliness.

The master license agreement provided that if Dayan were in default of any of his obligations under the agreement, McDonald's would give him notice of default and an opportunity to correct the deficiencies within 60 days. Failure to correct the deficiencies entitled McDonald's to terminate Dayan's master license.

After the agreement was executed, Dayan assigned his interest to Raybill Associates, an Illinois limited partnership. Raybill then sublicensed Paris Mac, a French corporation, to operate the McDonald's restaurants in Paris. Thereafter, Paris Mac sublicensed Pigalux, another French company, to operate three restaurants in Paris. Paris Mac also sublicensed LeLazy Place, another French company, to operate four restaurants in Paris. Paris Mac also operates six restaurants in the Paris area itself.

By a supplement to the agreement, Dayan and McDonald's agreed that France and Illinois had jurisdiction to resolve disputes between them.

The supplement stated in relevant part:

"The subsidiary, Raybill, Mac France and Paris Mac each agrees to and does hereby submit to the jurisdiction of the Circuit Court of Cook County, Illinois County Department, Chancery Division (Circuit Court) for the sole purpose of enforcing compliance with the Agreement as supplemented by this Supplement and for determining any disputes which may arise in connection therewith * * * This provision shall not prevent presentation of any matter to courts> of competent jurisdiction in France."

McDonald's alleges that from 1973 through April 1978 it notified Dayan of numerous operating deficiencies in the Paris restaurants. In June 1977 McDonald's conducted a full field study of several of the restaurants. At the conclusion of the study, McDonald's sent a letter to Dayan describing the deficiencies found and noting that a notice of default requiring remedial action within 60 days was justified. The letter stated that if a subsequent inspection found the operations still unsatisfactory, a default procedure under the master license agreement would follow.

On March 29, 1978, under the provisions of French law, McDonald's appeared before a judge of the Tribunal de Grande Instance de Paris, a civil court of general jurisdiction for the city of Paris. McDonald's purpose was to seek the appointments of four Huissiers to conduct investigations to determine whether there were facts indicating noncompliance with the master license agreement. (Under French law, Huissiers are court appointed officials authorized to investigate facts for potential use in legal proceedings.)

Based on findings by the Huissiers, on April 14, 1978, McDonald's gave notice to Dayan of default under the master license agreement. On April 24, the French corporations operating the restaurants in question appeared before the French court and filed a motion to quash the order appointing the Huissiers. The motion was denied and currently, the matter is still pending in that court.

On May 11, 1978, McDonald's filed a second suit in the French court. In that cause, McDonald's alleged that LeLazy Place has infringed on its trademark by constructing a "McDonald's" restaurant without first obtaining an operating license. Previously, McDonald's refused to grant the operating license, citing numerous deficiencies ...


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