I recently read an article about a lawsuit involving Dunkin Donuts and the duty of franchisors to actively take steps to protect their brands and the consequences of failing to do so. Although the lawsuit was based in Canada, it shines an indelible light on the importance of monitoring the various factors which play a part in US-based franchise systems, such as competitor creeping (as discussed in the Dunkin Donuts case) and infringement of the intellectual property which provides value to those systems. Sitting back might be cheaper, easier, and certainly less frustrating and time consuming, but failing to take affirmative steps could prove more costly. Of course, a solid brand management and protection strategy one of those best practices in which all franchisors should engage. But court decisions like the Dunkin Donuts case are, in my mind, a trigger to step back and evaluate if that strategy is doing enough.
Canadian Lawsuit Highlights the Importance of Franchisors Protecting their Brands