Craft Beer Cellar (“CBC”) accuses Brian Beaucher, Jessica Beeby and Nerd Craft, LLC for breach of a franchise agreement and subsequent infringement of Craft Beer Cellar’s trademark and trade dress. Beaucher and Beeby are former CBC franchisees, running a bottle shop and tap room in Grand Rapids, Michigan. CBC, which focuses on the sale of specialty and craft beers, has a franchise agreement that places operational requirements on its franchisees that prohibits the sale of mass produced macro-brewed beers. Franchisees are required to have detailed education and knowledge about the craft beers that they sell, and to obtain certain industry certifications along with their training from CBC. Beaucher and Beeby are said to have formed Nerd Craft for the purposes of running their franchise in 2016. By 2018, the defendants are accused of repeatedly violating the franchise agreement by selling prohibited mass-marketed beer, failing to update branding as CBC changed its branding, and failing to adhere to requirements relating to credit card and gift card processing, and failure to adhere to marketing requirements. Defendants are accused of ignoring both friendly reminders and formal demands regarding these obligations. In March 2020, CBC notified defendants of its intention to terminate and invoked a mediation clause of the franchise agreement. The COVID pandemic pushed the planned mediation date to September. Prior to that taking place, however, CBC discovered that the defendants had hacked CBC’s website and implanted a redirect link that drove traffic to an unauthorized site, craftbeercellargr.com, that extensively uses CBC’s marks without authorization. CBC says that the defendants then escalated their non-compliance by setting up another website, run.beer, that extensively used CBC’s marks. CBC terminated the franchise agreement, but say that the defendants continue to utilize CBC marks and ignoring their other obligations, including their opening a bar using the marks. CBC says that this suit can be maintained despite the alternative dispute resolution language of the franchise agreement because the agreement has terminated, and because the defendants voluntarily waived the right to ADR by proposing and agreeing to forgo the previously scheduled mediation. CBC brings counts of trademark infringement and breach of contract. The case is before Judge Saylor.
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