Cracker Barrel, Kraft Settle Differences


The good news for Cracker Barrel this morning is that it can finally start selling licensed products in grocery stores.

The bad news? It still can't use its full name.

Cracker Barrel and Kraft have settled their lawsuit over the Lebanon, Tennessee chain's effort to start selling products in grocery stores under the Cracker Barrel name. Under the deal, Cracker Barrel will sell items in grocery stores, including bacon, ham and turkey, but under the name "CB Old Country Store."

Cracker Barrel decided late last year to join the flood of restaurant chains leveraging their brand names to sell their licensed products in grocery stores, amid pressure from the activist investor Sardar Biglari. The company inked a licensing deal with John Morrell Foods to start selling bacon and lunch meat under the Cracker Barrel name.

But Kraft took issue with this and filed the lawsuit. The company sells Cracker Barrel cheese—the brands are unrelated—and for years the two companies coexisted, so long as they remained on their respective turf. When Cracker Barrel decided to enter the grocery product business, Kraft argued that the branded bacon and lunch meat products would inspire confusion among those who bought Cracker Barrel cheese.

That argument apparently won out, and Cracker Barrel shifted its name to focus on the "Old Country Store" portion of its moniker.

The risk now is that Cracker Barrel loses a key element in any licensing strategy—the name people use to refer to its restaurants, which is supposed to inspire confidence in the product while also giving it a recognizable brand name. Everybody calls the restaurant "Cracker Barrel." They don't call it "CB," and nobody uses the "Old Country Store" part. But apparently that's what happens when your restaurant brand shares the name with a brand of cheese.

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