A federal court in Virginia recently ruled in favor of 7-Eleven, Inc., awarding the convenience store chain a default judgment against Sisara LLC, a former franchisee. The case, 7-Eleven, Inc. v. Sisara, LLC, highlights critical issues in franchise agreements, trademark enforcement, and the legal consequences of failing to meet contractual obligations.
Case Overview
In August 2021, 7-Eleven and Sisara entered a franchise agreement for a store in Roanoke, Virginia. The agreement included a promissory note through which 7-Eleven agreed to finance part of Sisara’s startup costs, including the franchise fee. Over two years, 7-Eleven issued multiple notices citing alleged violations, such as failure to meet cleanliness standards and maintain required financial thresholds. When Sisara failed to resolve these issues, 7-Eleven terminated the agreement in July 2024 and demanded compliance with post-termination obligations, including surrendering the store.
Sisara refused to comply, prompting 7-Eleven to file a lawsuit alleging breach of contract, trademark infringement, unfair competition, and violations of the promissory note. A court issued a preliminary injunction requiring Sisara to stop operating the store, which it did. However, Sisara never responded to the lawsuit, leading 7-Eleven to seek a default judgment.
Key Findings
The court granted 7-Eleven’s motion for default judgment, citing three main reasons:
- Breach of Contract: Sisara failed to pay outstanding amounts and violated post-termination obligations, directly harming 7-Eleven’s financial interests.
- Trademark Infringement and Unfair Competition: The court ruled that Sisara’s continued operation of the store using 7-Eleven’s marks created confusion among customers, violating trademark protections. This underscores the legal risks of unauthorized use of brand identifiers, even in the absence of explicit trademark registration.
- Promissory Note Violations: Sisara defaulted on its financial obligations under the promissory note, further entrenching its liability.
Implications for Businesses
The case underscores the importance of rigorous trademark monitoring and adherence to franchise agreements. For businesses, the ruling serves as a reminder that unauthorized use of a brand’s marks - whether through signage, branding, or operations - can lead to severe legal consequences, including injunctions and financial penalties.
Trademark confusability remains a central issue in such disputes. Courts often prioritize consumer protection, penalizing parties that exploit brand recognition to mislead customers. For franchisors, this case reinforces the need for clear contractual terms and proactive enforcement mechanisms to safeguard brand integrity.
Services like IP Defender can help businesses stay ahead of these risks by monitoring national trademark databases for conflicts and infringements. IP Defender’s global coverage, including 50+ countries, ensures brands are protected from rogue registrations that could harm their reputation and revenue.
The court awarded 7-Eleven $183,672.82 in damages and permanently barred Sisara from further trademark infringement, unfair competition, or unlawful possession of the store. This outcome reflects the high stakes of brand protection in competitive markets.