Restaurant chains often must deal with a mountain of legal issues aside from everyday business challenges, such as rising costs caused by inflation, increased interest rates, and changing consumer attitudes on dining.
McDonald's (MCD) is the most prominent restaurant chain currently facing major legal problems.
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The Chicago-based burger chain faces a class-action lawsuit and several individual civil cases filed against it after dozens of people in at least 13 states were infected with E.coli in October from allegedly eating the fast-food chain's Quarter Pounder hamburgers that contained contaminated onions provided by Taylor Farms of California, KTVQ-TV reported.
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Lease disputes are another legal problem facing fast-food chains that can sometimes be resolved in bankruptcy court if the parties can't reach an agreement.
Historic hamburger chain Frisch's Big Boy said it will be closing several restaurants, which could eventually amount to about two dozen, as it battles an eviction filing for over 20 locations in southwestern Ohio.
Frisch's Big Boy filed a motion on Oct. 21 in an Ohio court seeking a continuance on an eviction hearing on cases against over 20 locations to allow the burger chain to work with plaintiff and landlord NNN REIT LP on a schedule to close restaurants.
"Due to unforeseen circumstances and various other factors, Frisch's Restaurants Inc., operator of Frisch's Big Boy Restaurants, will be closing certain locations," Frisch's said.
Frisch's landlord sought to evict the burger chain from over 20 locations for failing to pay $4.5 million in rent, according to court documents.
The restaurant chain did not say whether it will consider bankruptcy protection.
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Frisch's website listed about 68 locations in Ohio, Kentucky, and Indiana as of Nov. 12.
And now, a huge chicken fast-food chain is launching legal action against a rival to protect its intellectual property.
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KFC files lawsuit against Church's Texas Chicken
Iconic fast-food chicken chain KFC on Nov. 8 filed a lawsuit against rival Church's Texas Chicken's parent alleging trademark infringement.
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Yum Brands (YUM) subsidiary KFC Corporation filed its complaint against Church's parent company, Cajun Operating Company in the U.S. District Court for the Eastern District of Texas alleging that the rival chicken chain was using KFC's registered trademark "Original Recipe" in advertising to promote its chicken.
Kentucky Fried Chicken founder Harland Sanders created his chicken recipe with 11 herbs and spices in 1939 and began using the "Original Recipe" term in advertisements in 1972, before registering the "Original Recipe" trademark in 1984, the complaint said.
Church's in late September began advertising its chicken legs and thighs using the tagline, "Our Original Recipe Is Back," according to the complaint reported by Lawyer Monthly.
KFC reportedly sent a letter to Church's on Oct. 24 objecting to the rival's use of the term "Original Recipe," with concerns about consumer confusion and brand dilution from the use of the same branding language.
Church's didn't respond to KFC's objections
Church's reportedly did not respond to the Louisville, Ky.-based chicken chain's concerns and double-downed on the promotion on Oct. 31 with a press release titled: "Church's Texas Chicken Unveils The Return Of Its Original Recipe."
The Atlanta-based KFC rival abandoned the recipe that it created in 1952 about 10 years ago, Restaurant Business reported.
KFC's lawsuit seeks monetary damages from Church's and a court order preventing the rival from using the "Original Recipe" trademark in its advertising and marketing.
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