By Vohra & Vohra

The commercial success of franchising is built upon one indispensable asset—the brand. Whether in hospitality, healthcare, retail, education or personal care, franchise businesses derive their value from the goodwill associated with a recognised trademark. The franchise agreement grants the franchisee a limited contractual licence to exploit that goodwill for the duration of the commercial relationship. Equally important, however, is the principle that once the franchise relationship comes to an end, so does the franchisee’s authority to use the franchisor’s intellectual property.

The Delhi High Court’s decision in Geetanjali Salon Private Limited v. Amita Dubey & Ors. (Order dated 3 July 2026) is an important reaffirmation of this principle. Granting an ex parte ad interim injunction, Justice Anup Jairam Bhambhani restrained the defendants from continuing to operate a salon under the well-known “GEETANJALI” and “GEETANJALI STUDIO” trademarks after termination of the franchise agreement. The Court held that continued use of the marks was prima facie likely to constitute trademark infringement and passing off, while also exposing consumers to deception regarding the continued existence of a commercial relationship between the parties.

Although the order is interlocutory in nature, it carries significant implications for franchise businesses across industries and reinforces the close relationship between contractual rights and trademark protection.

The Background

Geetanjali Salon Private Limited is one of India’s best-known salon chains, operating more than 140 salons and franchises under the trademarks “GEETANJALI,” “GEETANJALI STUDIO,” and “GEETANJALI SALON.” The company demonstrated extensive commercial use of these marks, substantial advertising expenditure, and significant goodwill acquired over several years. It also relied upon multiple trademark registrations protecting the GEETANJALI family of marks.

The defendants approached the plaintiff to establish a GEETANJALI STUDIO franchise in Dhanbad, Jharkhand. Pursuant to a Franchise Agreement executed on 3 July 2024, the plaintiff granted the defendants a non-exclusive licence to use the GEETANJALI trademarks while operating the salon, subject to payment of continuing franchise fees.

According to the plaintiff, the defendants defaulted in payment of franchise fees, resulting in the issuance of a default notice followed by termination of the franchise agreement through a legal notice dated 21 April 2026. Despite termination, the defendants allegedly continued to operate the salon under the GEETANJALI brand, displayed the plaintiff’s trademarks on signage and invoices, and continued to represent themselves as authorised franchisees.

Franchise Agreements Create Limited Trademark Rights

Perhaps the most significant contribution of the judgment lies in its recognition of the legal nature of franchise trademark rights.

A franchisee does not acquire proprietary rights over the franchisor’s trademark merely because it is permitted to use the mark during the currency of the franchise agreement. Rather, such use is contractual and derivative in nature.

The licence exists solely because the franchisor authorises it.

Consequently, once the contractual relationship is validly terminated, the authority to use the trademark ordinarily ceases simultaneously.

The Court accepted the plaintiff’s contention that the defendants continued using the GEETANJALI trademarks despite termination of the franchise agreement and despite being called upon to discontinue such use. This continued use, on a prima facie assessment, constituted infringement of the plaintiff’s registered trademarks.

The decision therefore reinforces an important commercial proposition: termination of a franchise agreement does not merely end contractual obligations—it also extinguishes the contractual licence to use the franchisor’s intellectual property.

Passing Off Through Continued Association

The judgment also highlights the independent role played by the law of passing off.

Passing off protects commercial goodwill against misrepresentation likely to deceive consumers.

In franchise disputes, consumer deception often assumes a distinctive form. Customers visiting an outlet displaying the franchisor’s trademark naturally assume that the franchise relationship continues to exist and that services are rendered under the franchisor’s supervision and quality standards.

The Court observed that the defendants’ continued operation of the salon under the GEETANJALI marks was likely to mislead consumers into believing that the salon remained an authorised Geetanjali franchise. Such conduct was capable of damaging the plaintiff’s goodwill and reputation because consumers would inevitably associate the defendants’ services with the plaintiff’s business.

This reasoning reflects the broader objective of trademark law—not merely protecting proprietary rights, but preserving consumer confidence regarding the commercial origin of services.

Registered Trademarks Continue to Enjoy Strong Judicial Protection

The plaintiff relied upon several trademark registrations covering the GEETANJALI marks.

The Court noted that the trademarks had remained in continuous use for a considerable period and had acquired substantial goodwill. The existence of valid registrations, coupled with evidence of continued unauthorised use by the defendants, led the Court to conclude that a strong prima facie case of infringement had been established.

The order once again illustrates the practical value of maintaining a robust trademark registration portfolio alongside contractual franchise documentation.

Interim Injunction: Protecting Goodwill Pending Trial

Applying the settled principles governing temporary injunctions, the Court held that the plaintiff had successfully established:

• a prima facie case based upon registered trademark rights and post-termination unauthorised use;
• balance of convenience, since continued misuse would enable the defendants to trade upon the plaintiff’s goodwill; and
• irreparable injury, because damage to commercial reputation and consumer confidence cannot ordinarily be compensated solely through monetary damages.

The defendants were accordingly restrained from using the marks “GEETANJALI”, “GEETANJALI STUDIO”, or any deceptively similar mark in any manner amounting to trademark infringement or passing off until further orders of the Court.

Lessons for Franchisors and Franchisees

The judgment offers valuable guidance for businesses operating franchise models.

For franchisors, it underscores the importance of incorporating detailed post-termination obligations requiring immediate cessation of trademark use, removal of signage, discontinuation of branded invoices, and surrender of promotional material.

For franchisees, the decision serves as a reminder that continued use of a franchisor’s brand after termination may expose them not only to contractual claims but also to actions for trademark infringement and passing off.

The case also demonstrates the value of prompt enforcement. Delay in taking action against unauthorised post-termination use may increase the risk of consumer confusion and dilution of brand goodwill.

Conclusion

The Delhi High Court’s order in Geetanjali Salon Private Limited v. Amita Dubey & Ors. reinforces a fundamental principle underlying franchise law: the right to use a trademark is inseparable from the contractual relationship that authorises its use.

By granting immediate protection against continued post-termination use of the GEETANJALI trademarks, the Court has reaffirmed that former franchisees cannot continue to exploit the goodwill of established brands after their contractual authority has ceased. The judgment also highlights the close interaction between contract law, trademark infringement, and passing off in modern franchise disputes.