For multinational franchisors operating in Thailand, a key risk after franchise termination is that former outlets may continue operating in ways that could easily mislead consumers into believing they remain within the authorized network. To justify such operations, former franchisees often argue that the termination was invalid or ineffective. As a result, these cases are often treated as contractual disputes, making it difficult for franchisors to obtain injunctive relief before a final judgment confirms that the termination was lawful. Franchisors face significant commercial and reputational harm during lengthy proceedings, including consumer confusion, disruption to franchise restructuring, and damage to brand reputation and customer trust.

In an encouraging development, the Thai court in a 2025 case responded to the problem of unauthorized post-termination franchise operations by granting interim relief, recognizing broader brand and consumer harm, and awarding substantial damages, highlighting a successful litigation strategy of framing the dispute not merely as a contractual termination issue but as trademark infringement causing ongoing commercial injury.

The Subway Case

From December 2024 to mid-2025, an unauthorized “Subway®” franchise operation in Thailand attracted substantial public and media attention. Reports and online discussions about unauthorized Subway® stores circulated widely after complaints arose about food quality and customer experience at certain outlets that were allegedly operating after their franchise rights had expired. Because these stores continued to use Subway® trademarks, trade dress, and overall commercial appearance, many consumers were unable to distinguish them from authorized operations, resulting in reputational risks and customer confusion that affected the franchisor’s brand and franchise system in Thailand.

Subway treated this matter with the utmost seriousness and moved promptly to protect its brand, franchise system, and customers. It filed a civil action with the IP&IT Court seeking a permanent injunction and damages. During the proceedings, the court granted a preliminary injunction prohibiting the ex-franchisee from continuing to use the Subway® trademarks and related branding in connection with more than 100 outlets and related marketing activities.

The final judgment, handed down on November 3, 2025, went further still. The IP&IT Court ruled in favor of Subway, the franchisor, and awarded damages totaling THB 31,726,525.85 (nearly USD 1 million), together with interest at 5% per annum. The court ordered the defendants to cease all use of the franchisor’s trademarks and trade dress. It also imposed continuing daily damages of THB 171,987.06, calculated from the date the action was filed until the infringement ceases—a mechanism designed to address the economic harm caused by every additional day of unauthorized use. The damages awarded are understood to represent the highest amount ever granted in a trademark infringement case in Thailand.

Beyond the headline figures, the judgment’s reasoning is perhaps more significant for the development of Thai franchise enforcement practice. The IP&IT Court did not treat the matter as a narrow trademark dispute confined to the question of whether certain signs were used without authorization. Instead, the court expressly considered the broader consequences of the unauthorized operations: the reputational harm suffered by the franchisor, the deterioration of goodwill built up over years of investment, and the impact on consumers who were misled into believing they were patronizing an authorized outlet. In doing so, the court acknowledged what franchisors have long argued: that unauthorized post-termination operations are not merely a contractual inconvenience but an active source of harm to the brand, the franchise system, and the consuming public.

Take-Aways for International Franchisors

For practitioners advising international franchisors, the IP&IT Court judgment offers several important practical takeaways.

• First, it confirms that the IP&IT Court is prepared to grant preliminary injunctive relief in franchise-related trademark disputes where there is clear evidence of unauthorized trademark use and a risk of irreparable harm, even where the former franchisee disputes the validity of the franchise termination.
• Second, the significant damages awarded—both as a lump-sum amount and ongoing daily compensation—demonstrate that Thai courts are willing to recognize the full commercial impact of post-termination infringement, including damage to brand reputation, consumer confidence, and franchise operations.
• Third, the judgment highlights the importance of carefully structuring franchise agreements and termination procedures so that the franchisor’s IP rights are clearly distinguished from the contractual rights granted to franchisees. This can significantly strengthen trademark infringement claims in subsequent enforcement actions.

Whether this case reflects a broader shift in the approach of Thai courts or simply an exceptional response to a highly publicized dispute remains uncertain. Nonetheless, the Subway judgment sends a strong signal that franchisors in Thailand have meaningful legal mechanisms available to protect their brands when franchise relationships deteriorate.

This article first appeared in Managing Intellectual Property.