Kenneth Lowe Feb. 6, 2014, 10:55am

The corporation that owns the Kentucky Fried Chicken fast food restaurant chain is suing a former franchise-holder who it claims has gone rogue and continues to operate a KFC restaurant without their permission.

KFC Corp. (KFCC) filed suit late last month in Chicago's federal court against Aika Corp. and its owner, Aiman Kassar, alleging they did not pay several months' worth of franchise fees, but continue to operate under the KFC name and sell unapproved products.

"Aika has continued operating the restaurant, holding itself out as KFC-brand restaurant," the suit asserts. "Most concerning is that Aika apparently is selling food made from non-KFCC-approved food sources, which poses a threat to Plaintiff's KFC brand."

The KFC restaurant in question, at 19814 LaGrange Road in Mokena, was granted its franchise agreement in 2005, according to the suit.

Aika ceased paying its franchise fees in May of 2013 and was advised of its impending default by letter in August and September, the suit states, adding that it notified Aika in October it was stripped of its franchise.

As part of its franchise arrangement, Aika entered into an agreement that required it to, among other things, return any confidential KFC materials, "de-image" the restaurant by divesting it of any KFC branding, and not to operate any other similar restaurants within a 10-mile radius of the restaurant for a year.

The decades-old fried chicken fast food chain, formerly known as "Kentucky Fried Chicken," has more than 18,000 franchise locations across 120 countries. KFC argues the protection of its trademarks is an essential part of maintaining the quality of its restaurants and the "goodwill and reputation" they enjoy.

"KFCC has developed, advertised and promoted its trademarks and service marks at great expense so that the KFC marks have become valuable assets of substantial and inestimable worth to KFCC," the suit reads. "The KFC marks are symbols of quality foods served by KFC's chain of restaurants around the world."

In addition, KFCC alleges Aika failed to pay advertising fees it owed under the franchise agreement.

The suit includes counts for breach of contract, unfair competition and violations of the Lanham Act for trademark infringement and false designatin of origin, as well as trademark dilution.

KFCC is seeking an injunction enjoining Aika from continuing to use images and products with the KFC brand, including trademark images like the iconic Colonel Sanders and franchise-specific phrases like "Finger Lickin' Good," and otherwise strip the premises of anything having to do with KFC.

It also seeks declaratory judgment that Aika cannot continue operating the Mokena restaurant as a KFC, as well as the money Aika owes, plus damages and attorney's fees.

KFCC is represented by Daniel J. Weiss and Rachel S. Morse of Chicago-based Jenner & Block LLP.

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