Franchisee Sued Twice for Infringement: Who Bears the RMB 330,000 Compensation?

WISECODE Take

Many franchisors believe they can escape liability for trademark infringement simply by stating in contracts that franchisees are independent legal entities, but this ruling shatters that shield. It is like a coach giving illegal tactics in a match, leading to a player getting red-carded; the coach must take full responsibility. In this case, Mr. Li (franchisee) used the "Ken Gutou" mark under the guidance of a catering company and was sued by Ke Co. Due to the franchisor's improper rectification guidance, a repeat infringement occurred, and the Chengdu Court ruled that the franchisor must bear the RMB 330,000 compensation. This reminds business owners that franchising is a relay race of compliance. If the guidance provided by headquarters is legally flawed, courts will still rule that the franchisor bears full liability despite any disclaimer clauses. I suggest taking action: first, conduct comprehensive trademark searches before licensing; second, establish standardized guidance manuals reviewed by legal professionals. Don't let poor tactics ruin your brand league. Zhidian provides professional trademark monitoring services to help you expand steadily; we suggest consulting and evaluating specific compliance details.