What happens if a third party challenges the validity of the Beggars Pizza Proprietary Marks?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.2.8 Franchisee must promptly notify Franchisor of any suspected unauthorized use of the Proprietary Marks, any challenge to the validity of the Proprietary Marks, or any challenge to Franchisor's ownership of, Franchisor's right to use and to license others to use, or Franchisee's right to use, the Proprietary Marks.
Franchisee acknowledges that Franchisor has the sole right to direct and control any administrative proceeding or litigation involving the Proprietary Marks including any settlement.
Franchisor has the right, but not the obligation, to take action against uses by others that may constitute infringement of the Proprietary Marks.
Franchisor will defend Franchisee against any third-party claim, suit, or demand arising out of Franchisee's use of the Proprietary Marks.
If Franchisor, in its sole discretion, determines that Franchisee has used the Proprietary Marks in accordance with the Agreement, the cost of such defense, including the cost of any judgment or settlement, will be borne by Franchisor.
If Franchisor, in its sole discretion, determines that Franchisee has not used the Proprietary Marks in accordance with the Agreement, the cost of such defense, including the cost of any judgment or settlement, will be borne by Franchisee.
If any litigation relating to Franchisee's use of the Proprietary Marks arises, Franchisee must execute any documents and perform such acts as may be necessary to carry out such defense or prosecution in Franchisor's sole opinion including, without limitation, becoming a nominal party to any legal action.
Except to the extent that such litigation is the result of Franchisee's use of the Proprietary Marks in a manner inconsistent with the terms of the Agreement, Franchisor will reimburse Franchisee for its out-of-pocket costs in doing such acts; and
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, franchisees must promptly inform Beggars Pizza of any suspected unauthorized use or challenges to the validity or ownership of the Proprietary Marks. Beggars Pizza retains the sole right to manage and control any administrative or legal proceedings related to the Proprietary Marks, including settlements.
Beggars Pizza has the right, but not the obligation, to take action against potential infringements of its Proprietary Marks by others. Beggars Pizza will defend a franchisee against third-party claims arising from the franchisee's use of the Proprietary Marks, provided the franchisee has used the marks in accordance with the franchise agreement. If Beggars Pizza determines the franchisee did not adhere to the agreement, the franchisee will bear the costs of the defense, including judgments or settlements.
In the event of litigation, the franchisee is required to execute documents and perform actions necessary for the defense or prosecution as directed by Beggars Pizza, potentially including becoming a nominal party to legal action. Beggars Pizza will reimburse the franchisee for reasonable out-of-pocket costs incurred by the franchisee for such actions, unless the litigation arises from the franchisee's inconsistent use of the Proprietary Marks with the franchise agreement.
These stipulations are typical in franchising, as the franchisor must protect its brand identity and trademarks. Franchisees are obligated to cooperate in these efforts, but franchisors usually bear the primary responsibility and cost of defending their trademarks, provided the franchisee operates within the bounds of the franchise agreement.