If a Bang Cookies franchisee's use of a trademark is challenged, might they have to switch to a different trademark?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
The following principal trademarks identified in the schedule below are a part of the Licensed Marks, our System, and will be used by you in the operations of the Franchised Business but are not registered with the United States Patent and Trademark Office ("USPTO"). As to each of these principal trademarks:
We do not have a federal registration for each of these principal trademarks. Therefore, the trademarks identified below do not have many legal benefits and rights that are afforded to federally registered trademarks. If our right to use the trademarks (identified below) is challenged, you may have to change to an alternative trademark, which may increase your expenses.
Source: Item 13 — TRADEMARKS (FDD pages 38–39)
What This Means (2024 FDD)
According to Bang Cookies's 2024 Franchise Disclosure Document, a franchisee may be required to switch to an alternative trademark if the franchisor's right to use certain trademarks is challenged. Specifically, this applies to principal trademarks that are not registered with the United States Patent and Trademark Office (USPTO). Because these unregistered trademarks lack the legal protections of federally registered trademarks, a challenge to Bang Cookies's right to use them could force a franchisee to adopt a different trademark. This change could lead to increased expenses for the franchisee. Bang Cookies does have a trademark registered with the USPTO for "Bang Cookies" with a registration date of May 11, 2011.
Bang Cookies retains the right to modify or replace the Licensed Marks if a third party establishes superior rights to them. If Bang Cookies deems it advisable to discontinue or modify the Licensed Marks, franchisees must use the substitutions, replacements, or variations designated by Bang Cookies. In such cases, Bang Cookies's sole obligation is to reimburse the franchisee for the direct out-of-pocket costs of complying with this change, including alterations in signage and replacement of marketing materials, provided the franchisee documents these costs to Bang Cookies's satisfaction.
Bang Cookies will protect a franchisee's right to use the Licensed Marks and defend against infringement claims, provided the franchisee adheres to the Franchise Agreement, the manuals, and Bang Cookies's written instructions. The franchisee must also promptly notify Bang Cookies of any claims, give Bang Cookies sole control over the defense and settlement, and remain in compliance with the Franchise Agreement. If these conditions are met, Bang Cookies will indemnify the franchisee against direct damages for trademark infringement. However, Bang Cookies is not obligated to cover the fees or disbursements of any attorney retained by the franchisee if Bang Cookies defends the claim.