Chick-fil-A Wants You to Eat Less Kale?
No, well, I don’t think so anyway. If you’ve followed franchise or small business news over the past couple of weeks, you’ve probably heard that Chick-fil-A is trying to get Bo Muller-Moore to stop selling merchandise with the phrase “Eat More Kale.” According to news reports, Chick- fil-A sent the artist a letter claiming that his slogan infringes its trademark rights in the well-known “Eat mor chikin” trademark. The letter states that Eat More Kale “is likely to cause confusion of the public and dilutes the distinctiveness of Chick-fil-A’s intellectual property and diminishes its value.”
Several other big-name corporations have been in the news recently for raising similar issues. Nike recently sent a letter to someone selling “Just Jesu It” t-shirts. Best Buy sent a letter to Geek On. Hell’s Angels sent a letter to a designer in California.
These companies have to know that the public at large will view these types of claims as bullying the little guy and trying to squash small business, and might even cost them some customers. So why do they do it?
Trademarks are big business, and companies spend loads of money to develop, protect and promote them.
The Value of Trademarks Comes from Exclusivity.
Owning a trademark gives a company the exclusive right to use its brand or logo—and any confusingly similar brands or logos—on the products or services that it offers. If knock-offs or “parodies” (Eat More Kale isn’t a parody in the legal sense, but it seems like that’s kind of the idea) are allowed to exist in the marketplace, this dilutes the value of the trademark, and over time can start to disintegrate the company’s identity and even result in loss of exclusive rights altogether. “Eat More Kale” might not do this to “Eat mor chikin” on its own, but Chick-fil-A has to approach the situation as only the start of a land grab that could ultimately severely diminish the value it has built through likely millions of dollars in marketing and promotion.
As a small business owner, imagine if the shoe was on the other foot: You’ve developed a clever slogan that sets you apart from all of the other chains out there, and you’ve spent princely sums to let people know about it. Now all of a sudden someone else is taking advantage of your cleverness and expenditures—to their benefit and potentially to your harm. What would you do?
As a franchisor, Chick-fil-A also has a duty to its franchisees (or there is at least a heavy expectation) to protect its trademarks. A big part of any franchise opportunity is the right to benefit from the goodwill associated with the franchisor’s famous trademarks. Franchisees pay big money to use Chick-fil-A’s trademarks. Franchisees expect Chick-fil-A to protect its trademarks’ value, and they don’t want other people to benefit from them for free.
Of course, trademark enforcement efforts can sometimes cross the line. But, generally speaking, trademark owners do legitimately have valid and expensive interests behind their actions. All brand owners – and franchisors in particular – should develop and implement trademark monitoring and enforcement strategies to protect the value of their brands.
This article is provided for informational purposes only, and does not constitute legal advice.
Jeff Fabian is a franchise and trademark lawyer who assists business owners in protecting their brands so that they can stay focused on running their businesses. Jeff is also the co-founder of TrademarkIntel, provider of a new online software application for conducting instant trademark clearance and monitoring research. You can follow Jeff on Twitter @jsfabian.
How Much Do You Have to Spend?
Whether you’re purchasing a whopper from Burger King or joining the Burger King franchise system, the old mantra holds true: there’s no such thing as a free lunch. When you first get started running a franchise you need to pay a fee to allow you to enter into that franchise. These fees are the largest fees that you will normally pay a franchisor and typically range between $5,000 and $1,000,000 depending on the franchise. The franchisor charges this fee as a way to recoup the costs of expanding the franchise and to continue to grow. From a franchisee perspective, this is a major outlay and can take a long time to make back, but is a necessary step. Aspiring business owners must understand how much capital is available to them so they can ascertain how much they can afford. The cash you have at your disposal is known as liquidity, and there are numerous ways to increase your liquidity above the balance in your bank account. As a result, many people don’t realize how much capital they actually can use for investments, like launching a franchise branch. We’ll run through some of those methods below.
Protect Your Brand: Trademark Monitoring for Franchisors
Almost all franchisors own at least one federally registered trademark (and if they don’t, they should). As a general principle, brand owners are required to monitor and enforce their trademark rights in order to retain the exclusivity afforded by federal trademark registrations. This takes on additional complexities for franchisors—who need to make sure not only that no one is using their trademarks without authorization, but also that franchisees are making proper use of their marks.
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