Under what conditions will Aplus reimburse a franchisee for expenses incurred in a trademark dispute?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor shall reimburse Franchisee for all expenses reasonably incurred by Franchisee in any trademark or similar proceeding disputing Franchisee's authorized use of any Mark, provided that Franchisee has complied with the provisions of Section 6.3 and has complied with this Agreement and Franchisor's directions in responding to such proceeding. At Franchisor's sole discretion and option, Franchisor or its designee may defend and control the defense of any proceeding arising directly from Franchisee's use of any Mark. This indemnification shall not include the expense to Franchisee of removing signage or discontinuance of the use of the Marks. This indemnification shall not apply to litigation between Franchisor and Franchisee wherein Franchisee's use of the Marks is disputed or challenged by Franchisor. This indemnification shall not apply to any separate legal fees or costs incurred by Franchisee in seeking independent counsel separate from the counsel representing Franchisor and Franchisee in the event of litigation disputing Franchisor and Franchisee's use of the Marks.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, Aplus will reimburse a franchisee for reasonable expenses incurred in a trademark dispute under specific conditions. This reimbursement applies only when the dispute arises from the franchisee's authorized use of Aplus's trademarks (referred to as "Marks").
However, this reimbursement is contingent upon the franchisee's compliance with Section 6.3 of the franchise agreement, adherence to the entire agreement, and following Aplus's directions in responding to the legal proceeding. The reimbursement does not extend to the costs associated with removing signage or discontinuing the use of the Marks. Furthermore, Aplus retains the option to defend and control the defense of any proceeding arising directly from the franchisee's use of any Mark.
It's important to note that this indemnification does not apply to litigation between Aplus and the franchisee where the franchisee's use of the Marks is disputed or challenged by Aplus. Additionally, Aplus will not cover any separate legal fees or costs incurred by the franchisee for seeking independent counsel if there is litigation disputing the use of the Marks.