Who has the right to defend or settle claims related to Azal Coffee's intellectual property?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
If we become aware of a claim against you on account of any alleged infringement, unfair competition, or similar matter relating to your use of our intellectual property, we may 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 our intellectual property will be final. We do not have an obligation under the Franchise Agreement to participate in your defense or to indemnify you for expenses or damages in a proceeding involving our intellectual property licensed to you.
Prosecution of Infringers
If we become aware that a third party is using our intellectual property without our authorization, we will, in our sole discretion, determine whether or not we will take any action against the third party on account of the alleged infringement of our intellectual property. You will not have any right to make any demand against any alleged infringer or to prosecute any claim of any kind or nature whatsoever against the alleged infringer for or on account of the infringement. If we choose to prosecute any infringement of our intellectual property, you must sign all documents and do all acts necessary or incidental to that action as our counsel may reasonably request. We do not have an obligation under the Franchise Agreement to take affirmative action when notified of infringement. We will have exclusive rights in any damages awarded or recovered in any prosecution of an infringement claim related to our intellectual property and we will not have any obligation to share any awards or recoveries with you.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 39–41)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, Azal Coffee retains the sole right to defend, compromise, or settle any claim related to the use of its intellectual property. This means that if a claim is brought against a franchisee regarding the use of Azal Coffee's intellectual property, the franchisee cannot settle or compromise the claim without Azal Coffee's prior written consent.
This arrangement gives Azal Coffee significant control over how intellectual property claims are handled, ensuring consistency and protecting the brand's overall interests. While the franchisee can participate in the defense or settlement at their own expense, Azal Coffee's decisions regarding its intellectual property are final. However, Azal Coffee does not have an obligation to participate in the franchisee's defense or to indemnify them for expenses or damages in a proceeding involving the licensed intellectual property.
Furthermore, if Azal Coffee becomes aware that a third party is using its intellectual property without authorization, Azal Coffee has the sole discretion to decide whether or not to take action against the third party. The franchisee does not have the right to make any demands or prosecute any claims against the alleged infringer. If Azal Coffee chooses to prosecute, the franchisee must sign all necessary documents and cooperate as requested by Azal Coffee's counsel. Azal Coffee retains exclusive rights to any damages awarded or recovered in such cases and has no obligation to share these with the franchisee.
This allocation of rights and responsibilities is typical in franchising, where the franchisor needs to protect its brand and intellectual property consistently across all franchise locations. Prospective Azal Coffee franchisees should understand that while they are granted the right to use Azal Coffee's intellectual property, the franchisor maintains ultimate control over its defense and enforcement.