Is Belocal obligated to defend a franchisee against claims of infringement or unfair competition?

According to Belocal's 2025 Franchise Disclosure Document, Belocal is not obligated to protect a franchisee's right to use their marks or defend them against claims of infringement or unfair competition. Belocal is also not obligated to participate in a franchisee's defense or cover expenses or damages if the franchisee is involved in an administrative or judicial proceeding concerning the marks.

However, the franchisee must immediately inform Belocal of any trademark infringement or challenges to the use of the marks. The franchisee must also agree not to communicate with anyone other than Belocal, its affiliates, or their counsel regarding any infringement, challenge, or claim. Belocal has the sole discretion, but not the obligation, to take any action it deems appropriate and has the right to exclusively control any litigation or proceeding arising from alleged infringement, challenge, or claim concerning any of the marks.

The franchisee is required to provide assistance and execute any documents necessary to protect Belocal's interests in any litigation or proceeding related to the marks. The franchisee is also prohibited from using the marks as part of their corporate or domain name and must follow Belocal's instructions for identifying themselves as a franchisee and maintaining trade name registrations. The franchisee cannot take any action that would harm the validity of Belocal's rights to the marks or contest Belocal's interest in the marks.

Belocal retains the right to substitute different trademarks if the current marks can no longer be used or if Belocal determines that a substitution would benefit the system. In such cases, Belocal may require the franchisee to discontinue or modify their use of any mark or use one or more additional or substitute marks at the franchisee's expense. This lack of obligation to defend or indemnify franchisees is fairly typical in franchising, as franchisees are independent business owners. However, the franchisor's control over legal action related to the trademarks is also standard practice to protect the overall brand.