Mexican standoff; Taco Bill takes Taco Bell to court

By Nick Hall | 05 Nov 2019 View comments

A Mexican stand-off over naming rights is threatening to derail a monster expansion plan, with global magnate Taco Bell being taken to court by Aussie franchisor Taco Bill.

Victorian-focused fast food chain Taco Bill believes the similarity in names will cause confusion for customers, as some may believe the two are affiliated, potentially damaging the franchise’s current market position.

The court battle sees Collins Foods Limited, the Victorian and NSW licensee for Taco Bell under the pump, with the company confirming on Monday that legal action had been commenced.

“Collins Foods Limited confirms that it has been served with Federal Court proceedings by Taco Bill Mexican Restaurants (Australia) Pty Ltd (Applicant). The claim will be vigorously defended by Collins Foods with strong support from the Taco Bell brand,” Collins Foods said in a statement posted to the ASX.

Taco Bell v Taco Bill

It isn’t the first time the two parties have been embroiled in a naming battle. The pair met in court under similar circumstances when Taco Bell made its second failed attempt to break into the Australian market in the 1990s.

This time around however, success is swelling for the Taco Bell brand, following strong growth across Queensland. Earlier this year, Taco Bell Asia Pacific managing director Ankush Tuli revealed that the brand had earmarked plans to open 100 restaurants throughout Australia and New Zealand in the next five years.

The Victorian Taco Bell expansion is set to hit in early 2020, seeing the US chain step into the Taco Bill’s 32-store strong territory for the first time. However, despite the branding battle, Collins Foods is staying strong.

“(Taco Bill) has not quantified their claim and … does not seek any urgent orders to prevent Collins Foods from opening Taco Bell restaurants in Victoria,” Collins said.

History

The story of Taco Bill is a tale of entrepreneurship and endeavour. According to the chain, the restaurant was founded by ‘Taco Bill’ Chilcote, who came to Australia in 1966 from the border of Mexico and California “with just a corn grinder and a tortilla machine” to give the country its “first introduction to Mexican cuisine”.

Since the late 60s, Australia’s first Mexican franchise has become a staple in the Victorian fast-food scene, however the growing diversification of Mexican-inspired cuisine has seen a wealth of competitors enter the market.

Franchise chains such as Mad Mex and Guzman y Gomez have become national and international success stories, opening the door for global icon Taco Bell to stake its claim Down Under.

Founded by Glen Bell in California in 1962, Taco Bell has more than 7,100 restaurants operating worldwide.

The chain is in the throes of its third crack at Australia, the first of which failed in 1981 after a Sydney restaurant called Taco Bell’s Casa took it to court over its name.  Its second attempt in the late 90s failed even though it managed to registered its trademark in Australia, a development that locked it and Taco Bill in a four-year legal stoush.