Tuesday, July 20, 2010

The Joy of a Successful Franchise



Having been on business in Mexico recently, I was reminded of the joy that comes with building a successful and widely known franchise system. Many U.S. brands are known in far reaching areas of the world and have become household names in places where even running water might be considered a luxury. It brought to mind the question of when should a franchisor take the time effort and money to defend trademarks and tradenames?

Here was one example I happened across this week in the middle of Mayan country: "Mac Gomez". This business was built out of what looked like two-by-fours and loose sticks from the forest, but the signage and even the "Me Encanta" slogan were unmistakanable trademarks from our well-known burger builders. The question to McDonald's is, do you spend time, money and energy to fight something like this which is a clear violation of trademark and service mark infringement? Or do you treat this as a form of flattery and laugh off its signficance in the grand scheme of things?

I also happened across another business that I found not quite as obvious as "Mac Gomez", but similar in situation. "Mr. Pollo Kentucky" was a chicken operation that looked similar to most of the taco stands and other food operations throughout the city. They clearly had caught on that people for some reason like chicken from Kentucky and had followed the lead of our good friend the Colonel. Although this is certainly not as obvious of a case, it would stand to be a simple one for KFC in most cases.

Again, the question stands, how should large franchise systems that have created national or global brands manage their trademark and servicemark protection...what constitutes a meaningful threat to their names and marks?

Being that I am not a lawyer, I would say there is better advice than mine, but the way I perceive this scenario is that the letter of the law says one thing, the logical part of humanity should take precendence here. These are two examples of tribute to great franchise systems and successful companies, but should in no way be taken as serious threats to trademarks or tradenames. A key part of these situations from my perspective is that both locations and businesses are located in Mexico as well where the international trademark laws would be a bit more difficult to traverse as well.

In the end, only a few will see these tributes, but the ones who do will do double takes and chuckle to themselves as did I. Sometimes, it is good to have a sense of humor...even in franchising.

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