Is Belocal obligated to protect a franchisee's rights to use the Marks?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
We are not obligated to protect your rights to use the Marks or to protect you against claims of infringement or unfair competition. We are not obligated to participate in your defense or to indemnify you for expenses or damages if you are party to an administrative or judicial proceeding involving the Marks.
You must immediately notify us of any infringement of the Marks or of any challenge to the use of any of the Marks or claim by any person of any rights in any of the Marks. You and your Principals must agree not to communicate with any person other than us, any designated affiliate, and our or their counsel about any infringement, challenge, or claim of this type. We or our affiliates have sole discretion (but not the obligation) to take any action we deem appropriate and the right to exclusively control any litigation, or Patent and Trademark Office (or other) proceeding, arising out of any alleged infringement, challenge, or claim concerning any of the Marks. You must execute all instruments and documents and give us any assistance that, in our counsel's opinion, may be necessary or advisable to protect and maintain our interests
Source: Item 13 — TRADEMARKS (FDD pages 44–46)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, Belocal is not obligated to protect a franchisee's rights to use the Marks. Specifically, Belocal is not required to take action against infringement or unfair competition, nor is it obligated to participate in a franchisee's legal defense or cover their expenses if the franchisee is involved in legal proceedings concerning the Marks. This means that if a franchisee's use of the Belocal Marks is challenged, or if another party infringes upon those Marks, Belocal is not legally bound to intervene on the franchisee's behalf.
However, the FDD stipulates that franchisees must immediately inform Belocal of any infringement or challenges to the use of the Marks. Franchisees are also prohibited from communicating with anyone other than Belocal, its affiliates, or their counsel regarding such matters. Belocal retains the sole discretion, but not the obligation, to take any action it deems appropriate and has the right to exclusively control any litigation or proceedings related to alleged infringement, challenges, or claims concerning the Marks. Franchisees are required to assist Belocal by executing necessary documents to protect Belocal's interests in any litigation or proceeding.
This arrangement places the responsibility for protecting the Marks primarily on Belocal, but without a legal obligation to do so for the benefit of the franchisee. While Belocal has the right to control any legal action, the franchisee bears the risk of potential legal challenges to their use of the Marks without a guarantee of support from Belocal. Prospective franchisees should consider this carefully, as it could lead to unexpected legal expenses and business disruptions if the Marks are challenged and Belocal chooses not to intervene.