What must an All States M.E.D. franchisee do to protect and maintain the Franchisor's interests in litigation or other proceedings related to the Marks?
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.
Source: Item 23 — RECEIPTS (FDD pages 44–174)
What This Means (2024 FDD)
According to the 2024 All States M.E.D. Franchise Disclosure Document, a franchisee is required to take specific actions to protect and maintain All States M.E.D.'s interests in any litigation or proceedings related to its trademarks (referred to as "Marks"). This includes executing documents, providing assistance, and performing actions deemed necessary or advisable by All States M.E.D.'s legal counsel to safeguard the franchisor's interests in such legal matters or to protect the Marks.
Specifically, the franchisee must immediately inform All States M.E.D. in writing about any infringement, claims of infringement, unfair competition, or challenges to the use of the Marks. The franchisee is restricted from communicating with anyone other than All States M.E.D. and its counsel regarding these issues, although communication with the franchisee's own counsel is permitted at the franchisee's expense. All States M.E.D. retains the exclusive right to manage any administrative or judicial proceedings involving a licensed trademark.
It's important to note that All States M.E.D. is not obligated to participate in the franchisee's defense or provide indemnification for expenses or damages if the franchisee is involved in a legal proceeding concerning a licensed trademark, especially if the outcome is unfavorable to the franchisee. This highlights a potential financial risk for the franchisee, who may bear the costs of defending against claims related to the use of All States M.E.D.'s trademarks.