Who has the right to control administrative proceedings or litigation involving a trademark licensed by Beauty Bungalows to its franchisees?
Beauty_Bungalows Franchise · 2025 FDDAnswer from 2025 FDD Document
We have the right to control any administrative proceedings or litigation involving a trademark licensed by us to you. You must notify us within three days of when you learn about an infringement of or challenge to your use of our Marks. We will take the action necessary, in our sole and absolute discretion, to protect the unauthorized use of our Marks, which may include payment of reasonable costs associated with the action. We will indemnify you for any claims of infringement or challenges resulting from your approved use of our Marks in accordance with the Franchise Agreement, and we will be responsible for the defense and the cost thereof. If your use of the Marks in a manner that is unapproved under the Franchise Agreement or the Manuals results in any action against, we will not have any obligation to indemnify or defend you in any action resulting from that unapproved use.
Source: Item 13 — TRADEMARKS (FDD pages 32–34)
What This Means (2025 FDD)
According to Beauty Bungalows's 2025 Franchise Disclosure Document, Beauty Bungalows retains the right to control any administrative proceedings or litigation involving a trademark that they license to their franchisees. This means that if any legal issues arise concerning the use of the Beauty Bungalows trademarks, the franchisor, Beauty Bungalows, will have the authority to manage the legal process.
For a prospective franchisee, this is significant because it means they will not have to bear the burden of managing trademark-related legal issues. However, it also means that Beauty Bungalows will make the decisions about how to handle these issues, and the franchisee will have limited control over the process. Franchisees are required to notify Beauty Bungalows within three days if they become aware of any infringement or challenges to the use of Beauty Bungalows's marks.
Beauty Bungalows will take action to protect the unauthorized use of their marks at their discretion, which may include covering reasonable costs associated with the action. Beauty Bungalows also agrees to indemnify franchisees for claims of infringement or challenges resulting from the franchisee's approved use of the marks, and will be responsible for the defense and costs thereof. However, if a franchisee's unapproved use of the marks leads to legal action, Beauty Bungalows is not obligated to provide indemnity or defense.
This arrangement is fairly typical in franchising, as franchisors need to protect their brand's trademarks. It is important for franchisees to adhere to the guidelines provided in the Franchise Agreement and the Manual regarding the proper use of trademarks to ensure they remain covered by Beauty Bungalows's indemnity and defense obligations.