Under the Azal Coffee Franchise Agreement, is Azal Coffee obligated to take affirmative action when notified of infringement of the Franchise Marks?
Azal_Coffee Franchise · 2024 FDDAnswer from 2024 FDD Document
If we become aware that a third party is using the Franchise Marks or any name or mark confusingly similar to the Franchise Marks 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 the Franchise Marks. 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 the Franchise Marks, 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 the Franchise Marks and we will not have any obligation to share any awards or recoveries with you.
Source: Item 13 — TRADEMARKS (FDD pages 38–39)
What This Means (2024 FDD)
According to Azal Coffee's 2024 Franchise Disclosure Document, Azal Coffee is not obligated to take affirmative action when notified of infringement of the Franchise Marks. While franchisees are required to promptly notify Azal Coffee of any potential infringement, the decision to take action against the infringing party rests solely with Azal Coffee.
Specifically, Azal Coffee retains the discretion to determine whether or not to take any action against a third party allegedly infringing on the Franchise Marks. The franchisee has no right to demand action against an infringer or to prosecute any claims against them. If Azal Coffee chooses to pursue legal action, the franchisee is obligated to assist by signing documents and performing necessary acts as requested by Azal Coffee's counsel.
Furthermore, Azal Coffee retains all rights to any damages awarded or recovered in infringement cases and has no obligation to share these with the franchisee. This arrangement means that while franchisees are required to report potential infringements, they have no control over whether action is taken and receive no direct financial benefit from any resulting legal victories. This is a typical arrangement in franchising, as the franchisor owns the trademarks and is responsible for their overall protection.