Somehow, Cracker Barrel, the highwayside chain of family dining restaurants-slash-rocking chair retailers, has managed to coexist in the same universe with Cracker Barrel, the brand of cheese one can find in a grocery store. No more. Cracker Barrel, the cheese, is suing Cracker Barrel, the restaurant, over the Cracker Barrel trademark.
Actually, the plaintiff in this case is Kraft, the owner of Cracker Barrel cheese. And, for 40 years, it had no problem with Cracker Barrel the restaurant chain … until that chain decided last year to start selling food in grocery stores. Kraft filed a lawsuit in a U.S. District Court in Illinois, claiming that Cracker Barrel’s grocery store move violates its trademark.
Restaurant chains have increasingly found a nice income stream licensing their names to food manufacturers for sale in the grocery store—Columbus, Ohio-based Bob Evans is even buying food makers, for instance. A trip through the freezer section can yield California Pizza Kitchen pizza, Boston Market chicken and even White Castle hamburgers. Heck, the Marie Callendar’s grocery products have been far more successful than the restaurant chain, and Starbucks, Dunkin’ and Caribou now dominate the coffee aisle.
The theory, of course, is that these brand names bring with them a certain, good reputation among consumers who may think they’re getting to bring a piece of their favorite restaurant home. But, as far as we know, this is the first time that one of these moves is running up against another well-known product that goes by the same, exact name.
For what it’s worth, the cheese came first. Cracker Barrel cheese has been around since 1954 and today brings in about $100 million revenue to Kraft each year. Cracker Barrel’s first restaurant opened in Lebanon, Tennessee in 1969. Since then, the two Cracker Barrels have maintained a distance, neither one infringing on the other’s turf. According to the lawsuit, Cracker Barrel told Kraft that its use of the Cracker Barrel name provided motorists with “a relaxing and interesting break from driving.”
Then, in November, Cracker Barrel the restaurant reached a licensing deal with the John Morrell Food Group to license the Cracker Barrel name on ham, bacon, lunchmeats, jerky and other products to be sold at grocery stores. To Kraft, this is way too close to the cheese aisle.
Kraft says that these products are too related to the cheese and that “extensive, consumer confusion not only is likely, it is inevitable.” As you can imagine, Kraft wants to put the kibosh on the deal between Cracker Barrel, the restaurant, and John Morrell Food Group
Im guessing that this is going to come down to paying Kraft a very small amount of the gross sales of products with the name. I could see both sides agreeing to something like that. Combined with different logos & such so that no reasonable consumer would think that Cracker Barrel cheese and Cracker Barrel Old Country Store products were the same.
On the other hand, Its possible a judge could agree that no consumer would confuse the two brands.
In many legal situations, settlement often ends up being cheaper than "winning" for both sides.