What is an Annex Brands franchisee's responsibility if litigation is brought against them involving an Annex Brands mark?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
You must notify us promptly of any litigation brought against you involving any Mark, and you must deliver to us copies of any documents concerning the litigation that we request. We will decide whether to settle or defend any trademark litigation brought against you. If we decide to take action, we will do so at our expense, but you must cooperate with us. If the defense does not involve issues concerning the operation of your retail center, we will reimburse you for your out-of-pocket costs. If we decide not to defend or settle any trademark litigation brought against you, you must defend or settle the litigation at your own expense.
We will indemnify you to the extent that litigation involves defending against infringement or unfair competition if you are using the Marks in compliance with the franchise agreement and our Manuals and other materials and business manuals, and if you give us notice of the claim within 30 days of learning of it.
Source: Item 13 — Trademarks (FDD pages 64–69)
What This Means (2025 FDD)
According to Annex Brands' 2025 Franchise Disclosure Document, if a franchisee faces litigation involving any of Annex Brands' marks, they must promptly notify Annex Brands and provide copies of all relevant documents requested by Annex Brands. Annex Brands will then decide whether to settle or defend the litigation. If Annex Brands chooses to take action, it will cover the expenses, and the franchisee must cooperate. However, if the litigation involves issues beyond the operation of the retail center, Annex Brands will reimburse the franchisee for out-of-pocket costs. If Annex Brands decides not to defend or settle the litigation, the franchisee is responsible for defending or settling the matter at their own expense.
Annex Brands will indemnify a franchisee if the litigation involves defending against infringement or unfair competition, provided the franchisee was using the marks in compliance with the franchise agreement, manuals, and other business materials. To be eligible for indemnification, the franchisee must also give Annex Brands notice of the claim within 30 days of learning about it.
This arrangement means that franchisees are not entirely on their own when trademark litigation arises, but they may have to bear the costs if Annex Brands opts not to take action. It is important for prospective franchisees to understand these conditions and the potential financial implications of trademark-related lawsuits. Franchisees should ensure they operate their business in full compliance with Annex Brands' guidelines to maximize their chances of receiving support and indemnification in case of litigation.