Legal Question in Business Law in California

Maybe; maybe not. The deciding question in most such cases is the likelihood of confusion in the marketplace (between the competitors). Since this is so fact-dependent, it's impossible to say yes or no here. A judge or jury would have to hear and weigh a lot of evidence and testimony, and remember it's the plaintiff who bears the burden of proof.

Factors that would be considered in addition to the similarity of the names would be the distance between the businesses and the geographical extent of their marketing area; the similarity of the product lines; whether the name was highly distinctive or quite generic (with distinctive pointing toward infringement), whether there seemed to be a conscious and deliberate attempt to deceive customers, value of the trade name to the plaintiff, and so on.

The fact that there has been a non-compete time interval that has expired under the parties' agreement would pretty much remove the issue of breach of the sale agreement, leaving basically the unfair competition aspect for trial. I assume there is no federal trademark involved here, and that any litigation would be under the unfair competition statutes in the California Business & Professions Code.

As a Franchise Attorney I basically agree wit the other attorney answer. Depending on the distinctiveness of the name, you may also have an action for breach of the sale agreement because you said it was the business and rights to the name. What steps have been taken to protect the name? Usually it is registered as a trademark or service mark. If that hasn't been done, it should be a priority. Consult with a good business or franchise attorney in your area for specific advice.

Mr. Franchise - Kevin B. Murphy, B.S., M.B.A., J.D.

Franchise Foundations, a Professional Corporation