Federal judge to decide next week on Handel’s franchisee dispute

Staff report


A federal judge said she’ll have a decision next week on granting an injunction to Handel’s Homemade Ice Cream and Yogurt to keep an ice cream parlor run by a California franchisee, but not affiliated with the company, from staying open.

Judge Benita Y. Pearson of the U.S. District Court said at the start of the hearing Wednesdaythat she was inclined to grant the preliminary injunction.

Kenneth Schulenburg, who operates a Handel’s franchise in Encinitas, Calif., opened a Cali Cream ice cream store Tuesday in downtown San Diego.

Handel’s legal complaint argues that Schulenburg, his business partner Juliana Ortiz and their company Moonlight 101 Inc. can’t operate the San Diego store without improperly using Handel’s trade secrets, which include recipes and techniques.

Handel’s is entitled to the injunction, said Andrew Shapiro, company lawyer, to stop the stealing of its “valuable trademarks.”

But R. Michael Ghilezan, Schulenburg’s attorney, said the two stores are operated as separate entities.

Both sides want to end the franchise agreement but have been unable to come to an agreement.

To close Cali Cream now would bring financial disaster to the store’s owners as well as the lay off of employees, Ghilezan said.

But Judge Pearson said Schulenburg knew this case was pending when he opened the business.

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