Trade Dress Disputes in Franchising: The Drafting Lessons From Buc-ee's vs Mickey's

Why the Buc-ee's and Mickey's Dispute Matters Beyond Ohio

When two gas station brands end up in federal court over a beaver mascot and a colour scheme, the instinct is to treat it as a local curiosity. The settlement between Buc-ee's, the Texas-based travel centre giant, and Mickey's, an Ohio operator, over alleged logo similarity is anything but trivial. It illustrates a vulnerability that sits, largely unaddressed, inside thousands of commercial contracts: the failure to define, protect, and enforce trade dress with the same rigour applied to registered trademarks. For any business that licences its branding, enters co-branding arrangements, or expands through franchising, this case is a live tutorial in what not to leave out of the contract.

What Is Trade Dress and Why Contracts Routinely Underprotect It

Trade dress covers the total visual image of a product or business: the colour palette, the mascot silhouette, the signage layout, the overall commercial impression. Unlike a registered word mark or logo, trade dress protection is inherently fact-sensitive and harder to assert. Courts ask whether the look is distinctive and non-functional, and whether consumers are likely to be confused. That complexity is precisely why contracts tend to be vague about it. A typical IP clause might say something like "Licensee shall not use any mark confusingly similar to Licensor's registered trademarks," which sounds protective but leaves trade dress entirely exposed. Registered marks are a subset of a brand's identity. The overall aesthetic, the feel that customers recognise before they read a single word, lives outside that definition.

Which Clause Failed: The Narrow IP Representation

In brand licensing and franchise agreements, two clauses tend to fail when trade dress disputes arise. The first is the IP representation and warranty, which commonly covers only registered intellectual property. The drafter lists patents, registered trade marks, and copyrights, and stops there. The second is the non-compete or exclusivity clause, which may restrict a counterparty from opening a competing business but says nothing about how that business should look. A rival operator who avoids copying your name can still replicate your colour scheme, your mascot archetype, and your store layout, and remain technically compliant with a poorly drafted agreement. The result is litigation, or, as here, a settlement whose terms are confidential but whose legal costs are entirely real.

What a Tighter Contract Would Have Said

A well-drafted brand protection clause does several things that standard templates omit. It defines the protected brand identity in an attached schedule, including colour references by Pantone or RAL codes, mascot design parameters, signage proportions, and the overall trade dress. It extends the non-imitation obligation beyond registered marks to cover any element that, alone or in combination, creates a substantially similar commercial impression. It includes a representation by any counterparty, whether a franchisee, a licensee, or a co-brand partner, that their existing branding does not infringe the protected identity, and that they will notify the other side within a defined period if a third party raises a concern. It also specifies audit rights, so the brand owner can review how its identity is being presented or approximated in the field. None of this is exotic. All of it is routinely omitted.

Negotiating Brand Identity Provisions Without Losing the Deal

The counterargument from the other side of the table is that broad trade dress definitions create ambiguity and expose the licensee or franchisee to claims over things they cannot control. That concern is legitimate and the response is precision, not brevity. A schedule of protected elements gives both parties certainty. The licensor knows what it is protecting; the licensee knows exactly what it must avoid. Carve-outs can be included for pre-existing branding, provided it is disclosed at signing and accompanied by a legal opinion on non-infringement. A dispute escalation mechanism, requiring expert determination before litigation, further reduces the risk that a genuine grey area turns into expensive court proceedings. Broader definitions, paired with clear schedules and a structured resolution process, serve both parties better than the usual vague catch-all.

How to Avoid the Same Exposure Going Forward

Brands that are expanding geographically, as Buc-ee's is doing aggressively across the United States, face a compounding risk. Each new market brings incumbents whose branding may have developed independently but looks, to a consumer, uncomfortably familiar. Pre-entry clearance searches should cover not just registered marks in the relevant classes but also unregistered trade dress used by local competitors. Those searches should feed into the contract: any identified risk should be disclosed, addressed by a modification obligation on the counterparty, or resolved before the agreement is signed. Where a platform such as Adira is used to draft or review franchise or licensing agreements, the trade dress schedule and the extended IP representation clause should be standing requirements, not optional additions. The cost of inserting them at drafting is a fraction of the cost of discovering their absence in litigation.

The Settlement Signal and What It Tells the Market

Settlements in trade dress cases are almost always confidential, and this one is no exception. What the market can read from the outcome is that Buc-ee's treated the similarity as serious enough to litigate and, presumably, to extract meaningful terms from. That posture reflects a wider trend: as brands invest heavily in experiential identity, the visual and spatial elements of that identity are becoming primary commercial assets. Contracts that treat them as secondary, or ignore them entirely, are contracts that will eventually be tested. The drafting lesson is clear. Define what your brand looks like, not just what it is called. Protect that definition contractually. And make sure every counterparty who operates in your commercial orbit has signed up to that protection before they open their doors.