Does the Franchise Agreement require All States M.E.D. to participate in the defense of a franchisee in a trademark proceeding?
All_States_M_E_D Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall immediately notify Franchisor in writing of any infringement, claim of infringement, unfair competition, or challenge to its use of any of the Marks or claim by any person of any rights in any of the Marks. Franchisee shall not communicate with any person other than Franchisor and Franchisor's counsel in connection with any such infringement, challenge, or claim. However, Franchisee may communicate with Franchisee's counsel at Franchisee's expense. We are not required to take affirmative action when notified of these uses or claims. We have the sole right to control any administrative or judicial proceeding involving a trademark licensed by us. The Franchise Agreement does not require us to participate in your defense or indemnify you for expenses or damages if you are a party to an administrative or judicial proceeding involving a trademark licensed by us to you or if the proceeding is resolved unfavorable to you. Franchisee shall execute any and all instruments and documents, render such assistance, and do such acts and things as may, in the opinion of Franchisor's counsel, be necessary or advisable to protect and maintain Franchisor's interests in any such litigation or other proceeding or to otherwise protect and maintain Franchisor's interest in the Marks.
6.4 Indemnification for Use of Marks
Franchisor is not required to participate in your defense or indemnify you for expenses or damages if you are a party to an administrative or judicial proceeding involving a trademark. At Franchisor's option, Franchisor or its designee may defend and control the defense of any proceeding arising directly from Franchisee's use of any Mark.
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to All States M.E.D.'s 2024 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 licensed trademark, or if the proceeding's outcome is unfavorable to the franchisee.
However, All States M.E.D. retains the sole right to control any administrative or judicial proceeding involving a trademark they license. All States M.E.D. has the option to defend and control the defense of any proceeding arising directly from the franchisee's use of any Mark.
The franchisee is obligated to immediately inform All States M.E.D. of any infringement, claim of infringement, unfair competition, or challenges to the use of any Marks. The franchisee must also execute documents and provide assistance to protect All States M.E.D.'s interests in any litigation or proceeding related to the Marks.