Back
bars GM Foods from using GOLA Sizzlers trademarks post franchise termination
The on granted an restraining from using the trademarks 'GOLA', 'GOLA SIZZLERS' and 'GOLA RESTAURANTS' after the termination of the oral franchise arrangement between the parties. Justice Jyoti Singh's order came amid allegations of royalty default exceeding ₹17 lakh and systematic sales suppression at the Mohali outlet.
A Three-Decade-Old Brand vs. a Broken Franchise
, the plaintiff, traces its origins to 1988 when founder Mr. Naresh Kapoor established a business under the name 'Gola 31' in Delhi. The first restaurant under the 'Gola Sizzlers' name opened in Delhi in 1992. Today, the company operates approximately 17 restaurants across India along with a network of authorised franchise outlets, all run under its quality controls and supervision.
The company is the registered proprietor of the trademarks 'GOLA', 'GOLA SIZZLERS' and 'GOLA RESTAURANTS' across Classes 29, 30, 31 and 43 under the . For the financial year 2024-25, the company reported total revenue of approximately ₹73 crores, with about ₹2 crores spent on advertising across online and offline platforms.
The Dispute: An Oral FOFO Arrangement Turns Sour
The dispute centres on a Mohali restaurant operated by the defendants under a Franchise-Owned Franchise-Operated (FOFO) model, based on an oral agreement. Under the arrangement, the defendants were to pay 8% of monthly sales as royalty by the 7th of each month. All sales were to be recorded in SSPL software, to which the plaintiff had access for calculating royalty dues.
Because the mall owner, , was unwilling to lease premises solely to the defendants, Gola Sizzlers was constrained to be named as Lessee No.1 in a tripartite lease deed dated . The plaintiff emphasised that this arrangement created no proprietary or independent right in favour of the defendants to use its trademarks — that authority arose exclusively from the franchise arrangement.
The restaurant commenced operations in May 2024, and the defendants regularly complied with operational directions and remitted royalty payments initially. However, from July 2024, defaults began. Of 26 invoices raised, 16 remained unpaid; the plaintiff waived eight as a gesture due to longstanding family relationships, but defaults continued on the remaining invoices. Outstanding dues now stand at approximately ₹17,07,030, exclusive of interest.
Audit Findings: Suppressed Sales and Deactivated CCTV
The plaintiff's operations manager visited the Mohali outlet on and discovered serious irregularities — bills were being generated through the billing software only for selected transactions while cash payments from numerous customers were being accepted without recording corresponding sales. This deliberate suppression had the direct effect of reducing turnover and correspondingly reducing royalty payable. The plaintiff also alleged that the defendants de-activated the CCTV surveillance system.
Matters escalated during a promotional campaign with The Times of India in June 2026, when all franchisees were directed to honour discount vouchers. The defendants unilaterally refused on , demanded additional compensation, and even questioned the plaintiff's authority to run a nationwide campaign. The plaintiff formally terminated the franchise arrangement by communication dated .
Legal Arguments: , Termination and
Senior counsel for the plaintiff argued that the oral franchise arrangement does not fall within the definition of "" under , since under requires consent by written agreement. In any event, the oral arrangement stood terminated with effect from .
The plaintiff contended that continued use of the registered trademarks by the defendants — including on hoardings, third-party websites, food delivery platforms, pamphlets, menus, emails, letterheads and visiting cards — is a clear under and also amounts to , deceiving consumers into believing the Mohali outlet remains an authorised franchise.
Court's Analysis: Case Established
Justice Jyoti Singh found that the plaintiff had made out a case for grant of ad interim injunction, with the lying in the plaintiff's favour. The court held that the trademarks are valid and subsisting statutory registrations, and that use of the marks by the defendants — absent any continuing authorisation after termination — is .
Critically, the court observed that the erstwhile franchise relationship itself had conditioned consumers to associate the Mohali outlet with Gola Sizzlers, making confusion amongst the public and trade highly likely. The continued use appeared to be
"with a view to ride over and take advantage of the
and reputation of Plaintiff."
Key Observations
"Use of the marks by Defendants appears to be related to an oral franchise arrangement, which stands terminated by the Plaintiff vide communication dated . Use of the registered trademarks of Plaintiff by Defendants is thus without any right, title or authority and amounts to under ."
"There is every likelihood of confusion amongst the members of public and trade that the restaurant run by Defendants continues to be an authorised franchise outlet of Plaintiff."
"Continued use is with a view to ride over and take advantage of the and reputation of Plaintiff and is detrimental not only to the reputation of Plaintiff but also to the consumers, who would be deceived into availing services under the impression that the same emanate from Plaintiff or from an outlet operating under its quality standards."
The Order
Until the next hearing, the defendants, their trustees, officers, employees, agents, advertisers, distributors, franchisees, representatives and assigns are restrained from using the trademarks 'GOLA', 'GOLA SIZZLERS' and 'GOLA RESTAURANTS' or any identical or mark in relation to their restaurant, including on any hoarding, signage, banner, poster, pamphlet, menu card, letterhead, visiting card, third-party website, food delivery platform or any other promotional material.
The matter is listed for further hearing on .
