Delhi High Court Restrains Mohali Restaurant From Using 'GOLA' Marks After Franchise Termination

The Delhi High Court on 5 August restrained GM Foods and another, operators of a restaurant in Mohali, from using the trademarks "GOLA," "GOLA SIZZLERS" and "GOLA RESTAURANTS" following termination of their franchise arrangement with Gola Sizzlers Private Limited over royalty defaults and alleged sales suppression.

Allowing the application, a Bench of Justice Jyoti Singh observed that "prima facie without any right, title or authority and amounts to infringement under Section 29(2)(c) of the 1999 Act."

Gola Sizzlers told the Court that it opened its first restaurant in Delhi in 1992 and currently operates around 17 restaurants and several franchise outlets. It submitted that it holds registered trademarks for "Gola," "Gola Sizzlers" and "Gola Restaurants" across multiple classes.

The company submitted that it had an oral Franchise-Owned Franchise-Operated arrangement with the defendants for the Mohali outlet, under which the defendants were required to pay 8% of their monthly sales as royalty and were permitted to use its trademarks, recipes and business systems.

Since the mall owner was unwilling to lease the premises solely to the defendants, Gola Sizzlers was named as a co-lessee in the lease deed. However, the company claimed that this arrangement did not confer any independent right on the defendants to use its trademarks.

According to the plaint, the defendants regularly paid royalty until July 2024, after which they began defaulting despite reminders. Out of 26 invoices raised, 16 remained unpaid. Gola Sizzlers said it waived eight invoices as a goodwill gesture, but defaults continued in respect of the remaining invoices, resulting in outstanding dues of over Rs. 17 lakh.

The Court found that Gola Sizzlers had made out a prima facie case. It held that the defendants' continued use of the trademarks after termination of the franchise arrangement was without any continuing authorisation and amounted to infringement under Section 29(2)(c) of the Trade Marks Act, 1999.

It also noted that the erstwhile franchise relationship had conditioned consumers to associate the Mohali outlet with Gola Sizzlers. It held that "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."

It further observed that the continued use of the trademarks was "prima facie with a view to ride over and take advantage of the goodwill and reputation of Plaintiff and is detrimental not only to the reputation of Plaintiff but also to the consumers."

Accordingly, the High Court restrained the defendants, their agents, franchisees and representatives from using "GOLA," "GOLA SIZZLERS," "GOLA RESTAURANTS" or any deceptively similar mark in relation to their restaurant, including on signage, menus, letterheads, third-party websites and food delivery platforms, until the next hearing.

The matter is listed for 17 August 2026.