A federal judge in Delaware denied U Swirl LLC’s request for a temporary restraining order and preliminary injunction in a dispute arising from its acquisition of a frozen yogurt franchise system from U-Swirl International Inc. and Rocky Mountain Chocolate Factory Inc. The court also partially dismissed several claims in the case, narrowing the litigation going forward. See U Swirl v. U-Swirl International and Rocky Mountain Chocolate Factory, No. 24-1243-GBW (D. Del. May 18, 2026).

U Swirl purchased the franchise system in May 2023 under an asset purchase agreement (APA) that included more than 50 frozen yogurt franchise locations and related intellectual property, including social media assets. The company alleged that the sellers failed to transfer administrative control of Facebook and Meta business accounts associated with brands such as CherryBerry, Yogurtini, Aspen Leaf, Fuzzy Peach, Yogli Mogli, Let’s Yo! and U-Swirl Frozen Yogurt.

The dispute intensified in February 2026 when false posts appeared on several franchise Facebook pages announcing store closures. U Swirl claimed it lacked administrative access to remove the posts or regain control of the accounts because ownership credentials had never been transferred. The company sought emergency court intervention to prevent further postings, restore deleted pages, and compel transfer of account control.

U.S. District Court Judge Gregory B. Williams for the District of Delaware held, however, that U Swirl failed to demonstrate a likelihood of success on the merits of its breach-of-contract claim, a prerequisite for injunctive relief. The court emphasized that the APA required transfer of social-media assets only “to the extent transferable.” The record showed that Rocky Mountain personnel repeatedly attempted to work with Meta and U Swirl to resolve access problems, suggesting an ongoing transfer effort rather than a clear contractual breach.

The court acknowledged unanswered questions regarding how administrative access was lost and who ultimately controlled the accounts, but concluded that those issues required further factual development and did not justify the “extraordinary remedy” of an injunction. As a result, the request for both a temporary restraining order and preliminary injunction was denied.

The court also ruled on the defendants’ partial motion to dismiss. Although Williams found that U Swirl adequately alleged misrepresentations concerning undisclosed contracts and business relationships during negotiations, the court nevertheless dismissed the fraudulent-inducement claim because U Swirl failed to plead damages distinct from its contract damages, a requirement under Delaware law.

In addition, the court limited U Swirl’s breach-of-contract claim by dismissing it to the extent it relied on implied contractual obligations. The court found that the complaint failed to identify any specific implied covenant and instead focused on alleged breaches of express provisions in the parties’ agreements.

The ruling leaves U Swirl’s core contractual claims alive but significantly narrows the case while underscoring the growing importance—and legal complexity—of transferring control of social media assets in franchise and business-acquisition transactions. The case demonstrates how a buyer can spend millions acquiring a business yet still end up unable to control its Facebook and Instagram presence. Although the APA included social-media assets, the parties apparently did not achieve a clean, documented transfer of administrative control at closing. When problems later arose, the buyer was left arguing about contractual language and platform permissions.For buyers, the lesson is straightforward: ownership of a social-media account is meaningless without actual administrative control. Closing checklists should require:

• Transfer of administrator rights before closing funds are released.
• Verification of all usernames, passwords, recovery emails, and two-factor authentication credentials.
• Written confirmation that the buyer can add and remove administrators.
• Testing of access on every platform.

The most consequential contractual language in the case may have been three words: "to the extent transferable." The court found that U Swirl had not shown a likelihood of success because the contract expressly limited the transfer obligation and the buyer failed to demonstrate that the clause meant only legal transferability.

Buyers should insist that acquisition agreements specify:

• What steps the seller must take.
• Whether the obligation is a best-efforts obligation or an absolute obligation.
• What happens if a third-party platform refuses to cooperate.
• Whether the seller remains responsible until access is actually achieved.

Absent such language, a seller may successfully argue that it tried to transfer the asset but could not overcome platform restrictions.

Closing Deliverables Must Include Third-Party Platform Cooperation. A notable feature of the opinion is Meta's central role. The evidence showed that platform restrictions and administrator-permission issues repeatedly interfered with the transfer process. The court viewed those facts as evidence of ongoing efforts rather than contractual breach.

Modern buyers increasingly depend on assets controlled by third parties:

• Meta
• Google
• Amazon
• Shopify
• Stripe
• Franchise software vendors.

The acquisition agreement should identify every platform requiring consent, cooperation, or account migration and make successful transfer a closing condition whenever feasible.

Buyers need to document everything in order to avoid problems. One reason U Swirl struggled to obtain injunctive relief was that the documentary record contained numerous communications showing Rocky Mountain personnel working with Meta to resolve access problems. The court repeatedly cited those efforts.

This creates an important litigation lesson:

When a post-closing dispute emerges, buyers should meticulously document:

• Requests for access.
• Seller responses.
• Platform communications.
• Escalation efforts.
• Operational harm resulting from delays.

The more complete the record, the easier it becomes to distinguish good-faith troubleshooting from actual nonperformance.

Reprinted with permission from June 16, 2026 issue of August 20, 2026 © 2026 ALM Media Properties, LLC. Further duplication without permission is prohibited. All rights reserved.