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(h) The USP of the salon services being provided by plaintiff and its franchises is that all the salons currently operating under the trade mark/trade name OZONE are governed by the Ozone Unisex Salon Operations Manual, which forms an important part of the Franchise Agreements that the plaintiff enters into with all prospective franchisees. The Operations Manual, encapsulates in detail, inter alia, the following policies and procedures which are mandatorily required to be followed by all its franchisees are as under:
"2.1 Upon the representations of the Franchisee that it has the requisite experience, knowledge, qualification, skill and financial capability to carry out its obligations under this Agreement, the Franchisor hereby grants to the Franchisee and the Franchisee hereby accepts the non-exclusive, non- transferable, non-assignable franchise to establish, run and operate the Franchised Business in the Territory as per the Systems and Standards and under the Intellectual Property of the Franchisor, during the terms of this Agreement. Franchisee's rights under the Agreement are limited as provided under the Agreement and the Franchisee does not have the right to sub-franchise or sub-license the rights granted under this Agreement to any third person."

b) Clause 5.3 The Franchisee will not allow the Premises used for the Franchised Business under this Agreement for undertaking any other trade or business or activities other than the Franchised Business."

        s




        c)    Clause of Non-Competition

        Clause 17.1

Neither the Franchisee nor the individuals (a sole proprietor/ partner / associate) shall during the term of the Franchisee and FOR THREE MORE YEARS AFTER TERMINATION/EXPIRY DATE OF THE AGREEMENT:

44. During the course of hearing, the suggestion was also made to the defendants that if they are agreeable, they may continue to provide the service of salon to the customers either from the franchisee premises i.e. from basement on the same terms and royalty or from the new premises, i.e. neighbourhood where the independent service of salon was opened under the name Hairmaster and the defendants may change the name from Hairmaster to OZONE and understanding between the parties may continue as per clause 2 of the Management Agreement and parties may meet together and discuss about the perk of royalty. Even an impression was also given on behalf of the plaintiff that it may be very less and unreasonable if service of salon is operated from the new place and the plaintiff would not charge any extra royalty if said services are provided from the basement of franchisee premises. But both the suggestions were not acceptable to the defendants. Dr. Singhvi submits that under this situation of refusal of suggestion, the plaintiff cannot allow the defendants to run parallel business, otherwise, all the franchisees would do the same activities in order to avoid paying the royalty to the plaintiff despite of agreement and the plaintiff who has the exclusive rights in the intellectual property in this trade, confidentiality and trade secrets, without any fault, would suffer loss in its business. Dr. Singhvi says that in order to show the hardship, the defendants very clearly in their pleadings gave an impression to the Court that defendant No.3 had already given the franchise agreements to third parties, i.e. at Chandigarh and Ashok Vihar (New Delhi) by placing the photographs that those premises are ready for operation of salon business.