Salad chain, Sweetgreen, announced on Thursday it had renamed its newest menu item as part of a tentative agreement with the burrito food chain Chipotle Mexican Grill.
The two are battling it out in a California federal lawsuit initiated by Chipotle, which claims Sweetgreen’s “Chipotle Chicken Burrito Bowl” infringed on its trademark just days after the salad eatery introduced the item.
A Sweetgreen representative commented on the litigation to CNBC, saying that the company decided to rename the menu item as the “Chicken + Chipotle Pepper Bowl” to focus on its business and serve customers without distraction.
“We are looking forward to putting this lawsuit behind us as we continue to connect more people to real food,” Sweetgreen added.
Chipotle also released a statement saying that it’s pleased that Sweetgreen changed the name to protect its trademarks, so both companies have agreed to resolve the lawsuit.
Since the announcement, some Sweetgreen customers received promotional emails on Thursday offering 50% off the item — under the original name — to celebrate National Burrito Day.
In Chipotle’s original complaint, the company said it sent Sweetgreen a cease-and-desist notice asking them to drop “Chipotle” from the name, but Sweetgreen never responded. (Sweetgreen told CNBC on Wednesday the company responded to the cease-and-desist notice on Tuesday after the lawsuit was filed.)
Sweetgreen’s stock closed down 6% on Wednesday after the lawsuit was disclosed, but shares recouped those losses Thursday. The salad chain’s stock has fallen 14% in 2023, giving it a market value of $821 million.
Chipotle, however, greatly exceeds with its $46.7 billion market value. The burrito chain’s stock is up 21% this year.
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