WINSTON-SALEM, N.C. — As Texas-based restaurant chain Whataburger gears up to expand into North Carolina, it's now suing a restaurant group of a similar name it claims violated a confidential agreement reached in 2022.
Whatabrands, the company behind the chain, filed suit against What-A-Burger #13 in North Carolina's Middle District federal court on Tuesday. The 39-page lawsuit first claims the Texas chain's Whataburger trademark was created first in 1950, while the What-A-Burger #13 trademark was created in 1969. Whatabrands then claims the Whataburger branding is now distinct even in states beyond where its restaurants currently operate, giving it strong common law rights on the mark.
Whataburger says in the suit it announced plans to expand to the Tar Heel State in 2020, and made it official in 2024 that it would open restaurants in North Carolina starting in 2025. But in 2022, Whataburger said it reached out to What-A-Burger #13 to discuss the possible confusion between their marks.
Whatabrands' suit claims it signed a confidential coexistence agreement that allowed What-A-Burger #13 to still use its own mark at its two brick-and-mortar locations in Mount Pleasant and Locust and on its food truck. However, Whataburger says What-A-Burger #13 had formed its own limited liability corporation (LLC) just days before that agreement and without telling Whataburger about it. Further, Whataburger says What-A-Burger #13 is using its mark outside of the agreement, and was told of at least four such violations in April 2024.
The suit claims the continued violations meant the confidential agreement was dissolved and triggered automatic consequences, including an immediate halt to the use of the What-A-Burger #13 mark. However, Whataburger says What-A-Burger #13 has continued to do so, essentially using the similar trademark to boost its own business at the risk of Whataburger's reputation and goodwill.
Whataburger claims What-A-Burger #13 has infringed on a federal trademark, unfairly competed with it, breached the contract, committed unfair and deceptive trade practices, and has unfairly competed under common law. The company is asking for a jury trial and, if a ruling in favor of it is issued, for the following to happen:
- For What-A-Burger #13 to stop using its mark
- For all signage using the What-A-Burger #13 mark to be destroyed
- For the transfer of the What-A-Burger #13 website domain be transferred to Whataburger
- Show proof that all of the above has been done
- For What-A-Burger #13 to pay profits made off of its mark sent to Whataburger
- Any financial relief the court finds appropriate
WCNC Charlotte has reached out to What-A-Burger #13 for comment on the suit.