If the Anago Franchisor requests assistance from the Subfranchisor in litigation involving the Proprietary Marks, what is the Subfranchisor's obligation, and will they be reimbursed for expenses?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Subfranchisor will promptly notify Franchisor in writing immediately and in no event later than 10 days following the date Subfranchisor becomes aware of any such infringement, unfair competition, challenge or use;
(b) Subfranchisor will not communicate with anyone except Franchisor and its counsel about any infringement, challenge or claim except under judicial process. Franchisor has sole discretion to take action as it deems appropriate (including not taking any action) in any infringement, challenge or claim, and the sole right to control exclusively any litigation or other proceeding involving any infringement, challenge or claim involving any Proprietary Mark. Subfranchisor must sign all instruments and documents, render all assistance, and do all acts that Franchisor's attorneys deem necessary or advisable in order to protect and maintain Franchisor's interest in any litigation or proceeding involving the Proprietary Marks or otherwise to protect and maintain Franchisor's interests in the Proprietary Marks; provided Franchisor will reimburse Subfranchisor for the reasonable out-of-pocket expenses incurred and paid by Subfranchisor in complying with these requirements; and
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, if a Subfranchisor becomes aware of any infringement, unfair competition, challenge, or use similar to any Proprietary Mark, they must promptly notify Anago in writing, no later than 10 days after becoming aware of it. The Subfranchisor is obligated to sign documents, provide assistance, and perform actions deemed necessary by Anago's attorneys to protect Anago's interests in any litigation or proceeding involving the Proprietary Marks.
Anago has the sole discretion to take action, including not taking any action, regarding any infringement, challenge, or claim involving any Proprietary Mark. Anago also has the exclusive right to control any litigation or other proceeding related to such matters.
However, Anago will reimburse the Subfranchisor for reasonable out-of-pocket expenses that the Subfranchisor incurs and pays while complying with these requirements. This reimbursement provision is a benefit to the Subfranchisor, as it mitigates the financial burden of assisting Anago in protecting its Proprietary Marks.