Specialty Bakeries, Inc. v. RobHal, Inc.

Specialty Bakeries, Inc. (plaintiff) operated under the name Bagel Builders, a franchised bagel store. HalRob, Inc. and RobHal Management, Inc. (collectively, HalRob) (defendants) entered a franchise agreement with Bagel Builders and opened a bagel store in Broomall, Pennsylvania. The agreement included arbitration and noncompete provisions. The noncompete prevented competing stores from operating within four miles of HalRob’s store. Specialty Bakeries subsequently merged with Manhattan Bagel Company, Inc. (collectively, franchisor) (plaintiff). As a result, three preexisting, competing Manhattan Bagel locations were within the restricted four-mile radius. HalRob filed suit, seeking injunctive relief, requesting that the franchisor be permanently enjoined from associating with the competing bagel stores. The franchisor filed a petition to compel arbitration under the Federal Arbitration Act (FAA), arguing that the arbitrator should resolve the dispute under the parties’ agreement. The trial court granted the franchisor’s petition and ordered the parties to proceed with arbitration. Through a motion for a preliminary injunction, the franchisor sought to enjoin HalRob’s injunction proceedings during arbitration. HalRob argued that the Anti-Injunction Act prevented the franchisor from interfering with its injunction.