Collins Foods will move ahead with its expansion plans for Taco Bell in Victoria after settling an intellectual property stoush with longstanding independent eatery Taco Bills.
In a short statement published Thursday, the publicly listed fast-food franchisee told investors it had agreed to a ceasefire with the Melbourne-based SME, subject to filing final orders in the Federal Court.
The terms of the settlement remain undisclosed, but the outcome is that Taco Bell will be allowed to open and operate in Victoria.
Taco Bills, founded in 1967 and owned by Melbourne entrepreneur Tom Kartel, has 33 locations in Australia and was seeking to protect its intellectual property against the multinational.
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Taco Bills declined to comment on Thursday.
The legal fight, first reported by The Age last November, is not the first time Bills has come to loggerheads with Bell over its Australian expansion plans, with previous legal proceedings in the 1980s and early-2000s.
American YUM! Brands has given Collins Food rights to the Taco Bell business Down Under.
The franchisee is pursuing an aggressive expansion of Taco Bell in Victoria and Queensland, with plans in the works to open at least 100 stores by 2021.
Taco Bills had argued Collins Foods was essentially attempting to ride on their coattails by taking advantage of the fact the businesses have similar names.
It’s far from the first time an SME has found itself in the ring against a multinational brand over an intellectual property dispute.
The issue was canvassed at length in an access to justice report put together by the Australian Small Business and Family Enterprise Ombudsman (ASBFEO) last year.
The report found small businesses are often forced to abandon legal battles against larger firms due to a lack of resources and difficulty navigating the court system.
A survey of 1,600 firms undertaken by ASBFEO found 87% had experienced financial loss as a result of a legal dispute, while 16% said there had been an opportunity cost in terms of what they could have otherwise been doing.