Who receives any recovery obtained from infringers of the 360 Painting marks?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.4 Infringement. Franchisee shall promptly inform Franchisor in writing of any infringement or imitations of any Marks, the System, or any act of unfair competition against Franchisor or Franchisee as to which Franchisee has knowledge. Franchisee shall not make any demand or serve any notice, orally or in writing, or institute any legal action or negotiate, compromise or settle any controversy with respect to any such infringement or unfair competition without first obtaining Franchisor's written consent. Franchisor shall have the exclusive right to institute, negotiate, compromise, settle, dismiss, appeal or otherwise handle any such action and take such steps as it may deem advisable to prevent any such action and to join Franchisee and any other franchisees as a party to any such action to which Franchisor may be a party and to which Franchisee is or would be a necessary or proper party, but nothing herein shall be construed to obligate Franchisor to seek recovery of costs or damages of any kind in any such litigation, the assertion or waiver of such claims being within the sole discretion of Franchisor. The costs of any such action shall be paid by Franchisor, and any recovery obtained from such infringers shall be paid to Franchisor.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 56)
What This Means (2025 FDD)
According to the 2025 360 Painting Franchise Disclosure Document, 360 Painting retains all monetary recovery obtained from those who infringe on its trademarks. While franchisees are obligated to inform 360 Painting of any potential infringements, they are not allowed to pursue legal action themselves without the express written consent of 360 Painting.
360 Painting maintains exclusive rights regarding any legal actions related to trademark infringements. This includes the right to negotiate, settle, or dismiss such actions. 360 Painting also has the right to include franchisees in these legal proceedings if deemed necessary or appropriate. However, 360 Painting is not obligated to pursue any legal action or seek damages, as such decisions are at the sole discretion of the franchisor.
This arrangement means that while a 360 Painting franchisee is responsible for reporting any potential infringement of the 360 Painting marks, they do not directly benefit financially from any legal recoveries. The costs associated with pursuing legal action against infringers are borne by 360 Painting, which also receives any monetary compensation resulting from such actions. This is a fairly standard practice in franchising, as it allows the franchisor to maintain control over its brand and protect its trademarks consistently across all franchise locations.