Does the All States M.E.D. Franchise Agreement require the franchisor to participate in the franchisee's defense in a trademark proceeding?

According to the 2024 All States M.E.D. Franchise Disclosure Document, the Franchise Agreement does not require All States M.E.D. to participate in a franchisee's defense or indemnify them for expenses or damages if the franchisee is involved in an administrative or judicial proceeding concerning a trademark licensed by All States M.E.D., or if the proceeding is resolved unfavorably for the franchisee. However, the franchisee is obligated to take actions deemed advisable by All States M.E.D.'s counsel to protect and maintain All States M.E.D.'s interests in any proceeding or to otherwise protect and maintain their interests in the Marks.

This means that if a franchisee faces a trademark dispute related to the use of All States M.E.D.'s trademarks, the franchisee will likely be responsible for their own legal defense and any associated costs. All States M.E.D. retains the sole right to control any administrative or judicial proceeding involving a trademark licensed by them. This is a significant point for potential franchisees to consider, as it places the burden of legal defense on the franchisee while All States M.E.D. maintains control over the proceedings.

It is common in franchising for the franchisor to maintain control over trademark-related legal matters, as the trademarks are a core asset of the franchise system. However, the extent to which the franchisor supports the franchisee in such disputes can vary. Prospective All States M.E.D. franchisees should carefully evaluate this aspect of the Franchise Agreement and consider obtaining legal counsel to fully understand their obligations and potential liabilities in trademark-related legal proceedings. Franchisees should also be aware that All States M.E.D. does not have a federal registration for their principal trademark, which may increase expenses if the right to use the trademark is challenged.