El Pollo Loco Brings Trademark Suit Against Franchisee After Unauthorized Operations

In a complaint filed Friday in the Central District of California, franchise fast-casual restaurant operator El Pollo Loco filed suit against MIK Food, alleging that the defendants continued to operate an El Pollo Loco location in Santa Barbara, California even after their contract expired. The complaint pursues remedies for trademark infringement alongside contract claims.

El Pollo Loco (EPL), the complaint said, operates a chain of fast-causal restaurants that sell “flame-broiled food items and related products.” EPL frainchisees run their restaurants alongside marks owned by EPL and “EPL’s distinctive plan of food service operation.” Other intellectual property identified by the plaintiff includes trade secrets and marketing materials provided to franchisees.

According to the plaintiff, the defendants had been a franchisee since 2008. However, in recent years, the location at issue has struggled with health violations and failed inspections. The plaintiff gave the defendants an ultimatum to divest the franchise to another owner; after a year’s worth of extensions, there was no sale and the franchise agreement expired, the complaint said. While the agreement expired in September, the plaintiff alleged that the restaurant remains in operation as an EPL location.

The complaint noted that the contract provides for the termination of the agreement; under the contract, the franchisee must stop using trademarks, trade secrets, the El Pollo Loco System, and other proprietary techniques.

The specific claims brought include breach of contract, service mark infringement, false designation, common law trademark infringement, unfair business practices, and unjust enrichment. The plaintiffs are represented by Mortenson Taggart.