Dairy Queen sues former franchisee for trademark infringement
US fast-food chain Dairy Queen is suing a former franchisee over the continued use of Dairy Queen trademarks after the termination of an agreement.
The American Dairy Queen Corporation (ADQ) filed the complaint on Tuesday, 16 January, at the US District Court for the Western District of Washington.
ADQ alleged that the Washington-based defendants, Asara 12458 (a company), and Rizwan Dhanani (an individual), have caused irreparable harm by continuing to operate a Dairy Queen Grill & Chill restaurant and using trademarks owned by the fast-food chain.
Dairy Queen’s trademarks have been used by ADQ since 1940 in connection with the sale of frozen dairy products, cooked food products and other products.
Trademarks owned by ADQ include the ‘Dairy Queen’ and ‘Dairy Queen Grill & Chill’ names, and menu items such as the ‘Scrumpdillyicious’ and ‘DQ Treatzza Pizza’.
ADQ licenses the trademarks for use in its Dairy Queen and Dairy Queen Grill & Chill restaurants. There are currently over 6,800 restaurants in the US and internationally.
Asara acquired the rights to operate a Dairy Queen Grill & Chill restaurant in June 2012 under an operating agreement.
As part of the operating agreement, the franchisee was required to follow a set of rules which included the payment of licence fees and ensuring that three full-time managers worked at the establishment.
However, it was alleged that Asara did not have the correct number of full-time managers and did not maintain the restaurant to ADQ’s standards.
In November 2015, Asara was allegedly issued with a default notice for failing to perform maintenance on the building. This was followed by a letter alleging that the restaurant did not have at least three full-time managers.
ADQ said that the defendants had failed to cure the defaults. The operating agreement was terminated on September 30, 2017.
In its claim, ADQ said that the restaurant has continued to operate using the Dairy Queen trademarks and the use of the marks is “likely to confuse or deceive the public into believing … that the unauthorised activities of defendants are … approved by ADQ”.
ADQ said that the defendants owe it approximately $17,000 in past fees. The plaintiff is also seeking damages and has requested a permanent injunction.
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