McDonald’s Franchise Missteps

A few days ago I posted Franchise Direct’s Top Ten Franchises list on this blog. You can see it just below this posting. And topping the list is McDonald’s one of the most admired franchises in the world. Their franchise business system is as tightly composed as a Bach fugue, their franchisees enjoy considerable success, their employees can be as upwardly mobile within the corporation as their ambitions and abilities allow, many communities benefit from their Ronald McDonald Houses, which allow families to be together with their sick children being treated at a nearby hospitals.
There is a lot to admire about McDonald’s.

So what do you reckon was going through the heads of their legal department when they decided to go after Mr. P. Suppiah, and his wife Kanageswarry, who own the McCurry Restaurant, a popular eatery at the edge of Kuala Lumpur’s downtown?
The three judge panel asked the counsel for McDonald’s – I’m using my own words here – to go away for a while and come back when they had re-phrased their objection, because the nature of it wasn’t at all clear to them.
After shuffling some words around and coming back to court, Chief judge Arifin Zakaria said the court’s unanimous view is that McDonald’s plea to carry the case forward has no merit. ‘It is unfortunate that we have to dismiss the application with costs,’ he said.
McDonald’s will have to pay RM10,000 (US$2,860) to McCurry.
McDonald’s also lost an attempt to stop Singapore-based Future Enterprises from distributing products with names like ‘MacTea’ in 2004. ‘There are other similar cases where McDonald’s failed,’ said Mr Tan Tee Jim, a partner at Singapore-based Lee & Lee who acted for Future Enterprises, citing a Canadian ruling allowing another company to use ‘McBeans’ for gourmet coffee.
McCurry lawyer Sri Devi Nair said the ruling means McDonald’s franchise does not have a monopoly on the prefix ‘Mc’.
Can’t you almost hear the collective sigh of relief coming out of Scotland? Thankfully, their surnames can stay intact. No Carthur’s or Pherson’s… or Donald’s, for that matter.
One thing is for certain, they will be paying a lot more than US$2,860 they paid for court costs. It will be in the form of lost good will. The big franchise chains need to be more aware of the negative impact these kind of actions can have.
Next time you hear of a court case because someone scalded themselves on McDonald’s hot coffee, or a glass door shattered while being opened, or because there was no wheelchair access ramp, whose side are you going to be on?
Richard Branson’s Virgin has made similar moves to protect his brand name, once forcing a country-town muffler shop with the name “Virgin” to change it to something else.
Don’t tell me there is only allowed to be one Virgin?

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