If Azal Coffee successfully prosecutes an infringement claim related to its intellectual property, is the Azal Coffee franchisee entitled to a share of the damages awarded?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
You must promptly notify us of any claim, suit, or demand against you on account of any alleged infringement, unfair competition, or similar matter relating to your use of the Intellectual Property. We will then take action as we deem necessary and appropriate to protect and defend you against the claim by any third party. You must not settle or compromise any claim by a third party without our prior written consent. We will have the sole right to defend, compromise, or settle any claim, in our discretion, using attorneys of our choosing, and you agree to cooperate fully with us in connection with the defense of the claim. You may participate at your own expense in the defense or settlement, but our decisions with regard to the Intellectual Property will be final.
Source: Item 22 — CONTRACTS (FDD page 51)
What This Means (2024 FDD)
Based on the 2024 Azal Coffee Franchise Disclosure Document, the document does not explicitly state whether a franchisee is entitled to a share of damages awarded if Azal Coffee successfully prosecutes an infringement claim related to its intellectual property. However, the FDD does address intellectual property rights and their protection.
According to the FDD, Azal Coffee retains sole discretion over defending and prosecuting intellectual property claims. The franchisee is obligated to notify Azal Coffee of any infringement claims and cooperate fully in the defense of such claims, but Azal Coffee maintains the sole right to handle these legal matters. The franchisee can participate in the defense or settlement at their own expense, but Azal Coffee's decisions regarding intellectual property matters are final.
Since the FDD does not specify how damages from successful infringement claims are distributed, it is important for a prospective franchisee to seek clarification from Azal Coffee regarding this issue. Understanding the franchisor's policy on the allocation of such damages is crucial for assessing the potential financial benefits and risks associated with the franchise.