Executive Summary: Key Legal and Evidentiary Issues

• Core dispute over alleged breaches of a Farzi Café franchise agreement, including unpaid royalties, incomplete sales reporting, and brand harm, versus alleged failure by the franchisor to provide promised training and operational support.
• Significant conflict regarding interpretation of key contractual concepts, particularly the meaning of “net sales,” treatment of tips and gratuities, and the nature and duration of an agreed royalty reduction.
• Contested attempt to impose personal liability on the individual defendant, Ishmeet Kalra, despite his not being a party or guarantor under the franchise agreement and the absence of clearly pleaded tortious conduct.
• Failure of the plaintiff to satisfy the elevated test for mandatory interlocutory relief compelling payment of disputed royalties and an “exit fee,” including the requirements of a strong prima facie case and proof of irreparable harm.
• Lack of evidentiary basis for a Mareva (asset-freezing) injunction or ancillary asset-disclosure/examination orders, given no proof of asset dissipation or intent to defeat judgment.
• Judicial characterization of the interlocutory motion as frivolous, vexatious and akin to execution before judgment, with resulting implications for costs and future case management.

Background and parties

This case arises from a failed restaurant franchise venture in Mississauga, Ontario, operating under the Farzi Café/Modern Spice Bistro brand. The plaintiff, Massive Restaurant Private Limited, is an India-based franchisor that operates a chain of modern bistro-style restaurants internationally and is led by principal Zorawar Kalra. The corporate defendant, Massive Restaurants Inc., entered into a franchise agreement with the plaintiff on October 15, 2020 to operate the Farzi Café in Mississauga. The individual defendant, Ishmeet Kalra, is the directing mind of the corporate defendant but is not himself a party to the franchise agreement. The restaurant opened amid the COVID-19 pandemic, did not perform as planned, and the commercial relationship deteriorated. On June 28, 2024, the plaintiff commenced an action in the Ontario Superior Court of Justice alleging a range of contractual and tortious wrongs. The defendants responded with a statement of defence and counterclaim filed in September 2024, and the plaintiff defended the counterclaim in November 2024. By July 2025, the Mississauga Farzi Café had permanently ceased operations.

The franchise agreement and alleged breaches

The franchise agreement governed the right to operate under the Farzi Café brand, including payment of royalties based on “net sales,” submission of regular financial and operational reports, and adherence to prescribed operating standards. From the plaintiff’s perspective, the defendant franchisee systematically failed to meet these obligations. It alleged that the corporate defendant did not provide daily sales reports, underreported true sales figures, and failed to pay monthly royalties even after repeated demands. The plaintiff also complained of operational misconduct it said damaged the brand: poor and rude service, sub-standard food quality, untrained staff, misleading or poor menu descriptions, and unilateral alterations to menu items. In addition, the plaintiff claimed that the franchisee failed to provide financial statements and operating data, delayed paying employee salaries, did not consult on hiring and firing decisions as required, and falsely presented itself as a subsidiary of the franchisor while presenting Ishmeet as a principal of the franchisor to obtain unjust advantages. These alleged breaches formed the foundation for the plaintiff’s contractual, negligence, fraud and unjust enrichment claims.

Defendants’ counter-narrative and counterclaim

The defendants offered a starkly different account. They argued that the franchisor failed to live up to its own obligations under the agreement, particularly the promises of pre-opening and ongoing operational support that are critical in a franchise relationship. According to the defendants, the plaintiff did not provide adequate launch assistance, failed to send training personnel or written training materials, and did not supply training manuals. One key factual dispute involved immigration support: the defendants asserted that the plaintiff declined to sign a temporary resident visa application needed for a representative to enter Canada and assist with opening and operations, leaving the franchisee without promised on-the-ground guidance. The defendants maintained that any negative reviews, disputes, or poor customer impressions of the Mississauga restaurant were attributable to this lack of support and training by the franchisor, not to negligence or bad faith on their part. On the financial side, the defendants said the plaintiff agreed to a temporary reduction in royalty rates but later unilaterally increased the rate again, and that any royalty arrears arose against a backdrop of depressed sales and were cured by July 2023. They admitted that certain royalty payments were delayed but denied any fraudulent conduct. On “net sales,” they took the position that this term did not include tips, gratuities or taxes, and that their sales reports, which excluded those items, were consistent with the contract’s structure. By counterclaim, the defendants alleged that the franchisor breached its duty of fair dealing and good faith and misrepresented its capacity to provide support and training. They claimed to have suffered approximately $250,000 per month in lost business opportunities, revenues and out-of-pocket expenses, and sought significant compensatory and punitive damages for what they described as callous and high-handed conduct by the plaintiff.

Claims advanced by the plaintiff in the main action

In the statement of claim, the plaintiff sought substantial monetary and equitable relief. It claimed $5,000,000 in damages plus $500,000 in punitive and aggravated damages, and asked for a declaration that the defendants engaged in reckless and fraudulent misrepresentations of their financial performance and records. It further requested an order compelling production of all records, data and information required under the franchise agreement, an order for full financial and business accounting and equitable tracing of all monies arising from the Farzi Café operation from inception, and injunctive relief restraining the defendants from operating or holding themselves out as connected with the Farzi Café or Massive brands. These reliefs reflected both ordinary contract enforcement and broader equitable concerns revolving around alleged mismanagement and misrepresentation.

Key contractual concepts and policy-type terms

Although the case is not about an insurance or statutory “policy,” several core contractual terms functioned similarly to policy clauses in the dispute. First, “net sales” was a central concept. The plaintiff treated gross receipts as the base for royalty calculations and argued that discrepancies between the defendants’ reported sales and other indicators reflected deliberate under-reporting. The defendants, however, maintained that net sales were properly understood to exclude tips, gratuities and taxes, and that their royalty remittances accurately applied that definition. Second, the alleged royalty reduction arrangement raised questions about the modification of contractual obligations. The defendants claimed an agreed temporary reduction that was later unilaterally reversed by the plaintiff, while the plaintiff appeared to treat the higher royalty as continuously applicable, framing non-payment as breach. Third, the agreement’s support and training provisions were effectively “operational policy” clauses: the plaintiff was obliged, according to the defendants, to provide on-site support, staff training, manuals and launch assistance. The defendants treated the absence of such performance as a fundamental failure of the franchisor’s core obligations and a breach of the duty of fair dealing and good faith that underpins franchise relationships. The court did not finally interpret these terms at the motion stage, but they framed the legal and evidentiary issues for trial.

The interlocutory motion and categories of relief sought

While the pleadings were still evolving and before discoveries had begun, the plaintiff brought an extensive interlocutory motion supported by a voluminous motion record. It sought three broad categories of relief. First, monetary relief in the form of an order compelling the defendants to pay all royalties alleged to be owing up to October 13, 2023 and an “exit fee,” even though the precise sum was not specified and remained in dispute. Second, document-based relief, including immediate delivery of daily sales reports and receipts from November 2021 onward, all sales information provided to the landlord (Oxford Properties), corporate tax filings and financial statements from 2021 to the present, “all records, data and information” to which the franchisor would otherwise be entitled under the franchise agreement, and an order permitting an immediate audit of all sales since November 2021. Third, a Mareva injunction and ancillary asset-related orders, including freezing all of the defendants’ assets (corporate and personal), a sworn declaration of all worldwide assets, and compulsory examinations under oath regarding those assets. Initially, the motion also sought orders restraining further use of the Farzi Café brand and requiring the return of confidential information. When the Mississauga restaurant ceased operating in July 2025, much of the brand-use relief became moot, but the plaintiff did not formally amend its motion record to reflect that change. Shortly before or at the hearing, the parties agreed to an order for the return of confidential information, and a later case conference addressed access to and control of the Farzi Café Instagram account.

Governing legal tests for interlocutory and Mareva relief

The court began by reviewing the legal framework for the interlocutory relief sought. Under Rule 40 of the Rules of Civil Procedure and section 101 of the Courts of Justice Act, the court has discretion to grant interlocutory injunctions where it appears just or convenient, but such relief is exceptional and equitable in nature. The standard tripartite test from RJR-MacDonald applies: the moving party must show a serious issue to be tried, irreparable harm if the relief is denied, and that the balance of convenience favours granting the order. However, where the order sought is mandatory in nature—requiring a party to act, such as by paying disputed sums—or where the interlocutory order would effectively determine the main dispute or cause significant hardship, the threshold rises to a strong prima facie case or a situation where the applicant is clearly in the right. The Mareva injunction request was governed by a separate but equally stringent standard: the plaintiff had to demonstrate a real risk that the defendants would dissipate or remove assets from the jurisdiction to avoid satisfying a potential judgment. Without concrete evidence of such risk, freezing orders and their ancillary enforcement tools cannot be granted.

Documentary production and audit relief

On the plaintiff’s request for immediate production of extensive records and an audit of all sales since November 2021, the court held that the request was premature and procedurally improper. The parties had not yet exchanged affidavits of documents under the normal discovery regime, and examinations for discovery had not been conducted. The motion sought to bypass the ordinary phased process by compelling broad, motion-driven production and a forensic-style audit before the litigation had reached the discovery stage. The judge declined to do so, indicating that disputes over records and information should be addressed through the established discovery framework, once pleadings are settled and parties have disclosed their documents in the usual manner.

Analysis of the mandatory monetary relief

The heart of the motion was the attempt to obtain mandatory interlocutory orders compelling payment of royalties and an exit fee. The court treated this as a request for mandatory injunctive relief that, if granted, would amount to a partial final adjudication of the plaintiff’s claim. Applying the strong prima facie case standard, the court concluded that the plaintiff had not met the test and, in fact, had not even established the lower “serious issue” threshold on this record. Several disputed issues needed to be determined at trial: whether Ishmeet could be personally liable given that he is not a party or guarantor under the franchise agreement, whether there was a legally effective royalty reduction and on what terms, and how “net sales” should properly be defined for royalty purposes, including whether tips and gratuities were to be included. These matters involve credibility contests, contractual interpretation and factual findings that are unsuited to resolution on affidavit evidence at an interlocutory stage. The court also emphasized that it would be inappropriate to attempt to calculate royalty amounts owing on an incomplete record, particularly when the defendants had indicated an intention to retain an expert to perform audits and calculations. To grant the monetary relief sought would effectively give the plaintiff the substantive relief it seeks at trial without having proved its entitlement.

Irreparable harm analysis

The plaintiff argued that irreparable harm arose in two main ways: the alleged harm to its ability to re-establish or protect its brand in Canada in the absence of immediate royalty payments, and the reputational and goodwill damage to the Farzi Café brand attributed to the defendants’ operations and negative social media reviews. The court rejected both theories on the evidence presented. As a starting point, Farzi Café in Mississauga was no longer operating, meaning there were no ongoing royalties accruing under the franchise and no continuing operational impact on the brand from this specific restaurant. Any past royalty shortfalls were, by definition, quantifiable and compensable in damages if liability is later found. The plaintiff’s own financial evidence showed substantial annual revenues, assets and net worth, undercutting claims of financial fragility. With respect to brand harm, the court acknowledged that loss of goodwill can sometimes constitute irreparable harm in the franchise context, especially while a franchise is still operating under a disputed arrangement. Here, however, with the outlet closed and disputed responsibility for past operational problems, the alleged harm to the brand was found to be compensable in monetary terms if proven. On this record, the plaintiff had not demonstrated harm that could not be remedied by damages.

Balance of convenience and fairness considerations

In weighing the balance of convenience, the court found that it strongly favoured the defendants. Granting the monetary relief would effectively accomplish the plaintiff’s goal of execution before judgment: it would extract from the defendants disputed funds that might later prove not to be owed or might be offset by damages owed to the defendants. The judge noted that injunctive relief is intended to preserve rights pending trial, not to provide a shortcut to the final relief sought. The interpretation of the franchise agreement, the existence and scope of any royalty reduction, and the level of support and training provided by the franchisor were all live issues. It would be fundamentally unfair to impose payment obligations at this stage, particularly where Ishmeet’s personal liability had not been established and the pleadings disclosed no clear tortious foundation for personal claims. The court considered the plaintiff’s express admission that it sought interlocutory relief because it feared the defendants might not be able to satisfy a future judgment; this concern, while understandable from a commercial standpoint, cannot justify using interim injunctions as a de facto collection mechanism. As a result, the mandatory monetary relief was denied.

Mareva injunction and ancillary orders

The plaintiff’s request to freeze all of the defendants’ assets, including those of Ishmeet personally, and to compel global asset disclosure and examinations, was also firmly rejected. The judge reiterated that a Mareva injunction is a drastic remedy reserved for clear cases where there is evidence that a defendant is likely to dissipate or remove assets to avoid judgment. In this case, the record contained no evidence suggesting that the defendants were transferring or intending to transfer assets out of the jurisdiction or otherwise shielding assets. Without such evidence, there was no legal basis to grant a Mareva injunction. The court also underscored that Ishmeet’s position as an individual who is not a party to the franchise agreement and not alleged to be a guarantor made it especially inappropriate to target his personal assets. Ancillary orders, such as detailed asset declarations and examinations under oath, can only be granted in support of a valid Mareva order; they cannot be used to conduct premature judgment-debtor-style examinations in the absence of established liability. Furthermore, the plaintiff had not adequately demonstrated that it could respond to potential damages under its undertaking regarding the Mareva relief, a factor that weighs against granting such exceptional remedies. The court therefore refused both the freezing order and all related ancillary relief.

Finding that the motion was frivolous and vexatious

Beyond simply dismissing the motion, the court characterized it as frivolous, vexatious and abusive. It noted that the motion lacked legal merit, was launched without reasonable grounds, and sought relief that would effectively grant the plaintiff the substance of its claim—monetary recovery and execution-style examinations—without a trial. The failure to amend the motion after the business had ceased operations, leaving the court to deal with obsolete requests, reinforced the view that the plaintiff had not approached interlocutory relief with appropriate restraint. The attempt to obtain substantial personal relief against Ishmeet, despite the absence of pleaded facts supporting personal liability, was another aggravating factor. While the underlying action itself was acknowledged to raise serious, triable issues on both sides, the motion as framed and pursued was seen as an improper use of interim remedies, and the court indicated that this would be a relevant consideration when addressing costs.

Procedural directions and costs framework

Although the motion was dismissed, the court took steps to move the litigation forward in an orderly way. It directed that the matter be brought to the Brampton triage court so that a timetable could be set for a contemplated defence motion for security for costs and for documentary productions more generally. Both parties were granted leave to amend their pleadings: the plaintiff could amend its statement of claim to properly include the relief that it had attempted to obtain via motion, and the defendants were allowed to amend their statement of defence and counterclaim to add further defences and new claims against the plaintiff and its principal, with specific deadlines for service and filing. Any additional amendments would require leave of the court and would be managed under triage court supervision. On costs, the judge did not fix any dollar amount. Instead, the parties were encouraged to agree. Failing agreement, the court invited brief written submissions supported by bills of costs within defined timelines and indicated that if no submissions were filed, costs would be deemed settled between the parties.

Overall outcome, successful party and monetary result

In the final analysis, the interlocutory motion brought by the plaintiff, Massive Restaurant Private Limited, was dismissed in its entirety. The court refused to order early documentary production and audits, rejected the request for mandatory payment of royalties and an exit fee, and denied the Mareva injunction and all ancillary asset-related orders. The defendants—Massive Restaurants Inc., Farzi Café/Modern Spice Bistro and Ishmeet Kalra—were therefore the successful parties on this motion. As of this decision, no damages, royalties, exit fees or specific quantified costs were ordered in favour of any party; any costs award remains to be determined through agreement or subsequent written submissions, and the total monetary amount, if any, that will ultimately be ordered cannot presently be determined.