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What's in a Name? Name Disputes in the Geographical Expansion of Franchises

By Christopher P. Bussert

The goal of most franchised businesses is to achieve household name recognition on a nationwide basis. Achieving that goal through nationwide expansion, however, is easier said than done. Expansion raises a number of significant issues, not the least of which is whether the name of the franchised concept is identical or confusingly similar to the name of a similar business in the geographic areas under consideration and/or in other remote areas where the franchisor is not currently operating, but may be so doing in the future.

Indeed, at the time new geographic areas are being preliminarily assessed for expansion, or even before, a franchisor or its agents may be surprised to discover one or more similar businesses in remote geographic areas operating under the same or a closely similar name. This discovery is often the cause of much consternation for the franchisor, and it can lead to a number of legal issues:

  • Can the franchisor challenge that third party's use of a confusingly similar name in the remote geographic area?
  • If so, when can or should such a challenge be brought?
  • If the challenge is not brought immediately, does the franchisor risk forfeiting the right to ever challenge that use as a result of “sleeping on its rights”?

Priority Considerations

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