Is Beehive Homes obligated to protect a franchisee against trademark infringement claims?
Beehive_Homes Franchise · 2025 FDDAnswer from 2025 FDD Document
YOU must notify US in writing of any claim, demand or suit based upon or in connection with any or all rights which YOU have to use the trademarks, service marks, trade names, logotypes or commercial symbols. YOU must also notify US in writing of the use of, or claims of rights to, a trademark identical to or confusingly similar to the names and marks. WE have the right to defend any such claims, demands or suits. However, WE are not obligated by the Franchise Agreement or otherwise to protect YOU against any such claim, demand or suit, nor are WE obligated by the Franchise Agreement or otherwise to protect YOU against claims of infringement or unfair competition. YOU are given the right to protect YOURSELF, at YOUR sole cost, from any claims if WE elect not to.
If at any time it becomes advisable in OUR sole discretion to modify or discontinue any use of the names and marks and/or use one or more additions to or substitutes for the names and marks, YOU will do so and OUR sole obligation will be to reimburse YOU for tangible costs in changing signs and printed matter to comply with this obligation.
Source: Item 13 — TRADEMARKS (FDD pages 22–23)
What This Means (2025 FDD)
According to Beehive Homes' 2025 Franchise Disclosure Document, Beehive Homes is not obligated to protect franchisees against trademark infringement claims. While franchisees must notify Beehive Homes in writing of any claims or suits related to the use of trademarks, service marks, trade names, logotypes, or commercial symbols, Beehive Homes has the right, but not the obligation, to defend against such claims. The franchisee is given the right to protect themselves at their sole cost if Beehive Homes chooses not to defend the claims.
This means that if a franchisee is sued for trademark infringement related to their use of the Beehive Homes trademarks, Beehive Homes is not required to provide legal defense or cover any associated costs. The franchisee would be responsible for all legal expenses and potential damages. This is a significant risk for franchisees, as trademark litigation can be expensive and time-consuming. It is fairly common in the franchise industry for franchisors to offer some level of protection or assistance in trademark disputes, but in this case, Beehive Homes explicitly states they are not obligated to do so.
However, if Beehive Homes decides to modify or discontinue the use of any names and marks, or use additions or substitutes for the names and marks, the franchisee is obligated to comply. In such cases, Beehive Homes' sole obligation is to reimburse the franchisee for tangible costs in changing signs and printed matter to comply with this obligation. This reimbursement is limited to tangible costs related to changing signs and printed materials, and does not extend to other potential costs associated with rebranding or adapting to new trademarks.
Prospective franchisees should carefully consider this lack of obligation for trademark protection and factor in the potential costs of defending against infringement claims when evaluating the Beehive Homes franchise opportunity. It would be prudent to discuss this issue further with Beehive Homes and potentially seek legal counsel to fully understand the risks and potential mitigation strategies.