Will Ben Jerrys reimburse a franchisee's out-of-pocket costs for litigation related to the Proprietary Marks?
Ben_Jerrys Franchise · 2025 FDDAnswer from 2025 FDD Document
You must promptly notify us of any unauthorized use of the Proprietary Marks, any challenge to the validity of the Proprietary Marks, or any challenge to our ownership of, or right to use and to license others to use, or your right to use, the Proprietary Marks. We have the right to direct and control any administrative proceeding or litigation involving the Proprietary Marks, including any settlement. We have the right, but not the obligation, to take action against uses by others that may constitute infringement of the Proprietary Marks. We will defend you against any third-party claim, suit, or demand arising out of your use of the Proprietary Marks. If we determine that you have used the Proprietary Marks in accordance with the Franchise Agreement you have signed to operate the Shop, we will bear the cost of defense, including the cost of any judgment or settlement; however, you must bear the salary costs of your employees. If we determine that you
have not used the Proprietary Marks in accordance with the Franchise Agreement you signed to operate the Shop, you must bear the cost of defense, including the cost of any judgment or settlement. If there is any litigation relating to your use of the Proprietary Marks, you must execute all documents and do all things as may be necessary to carry out a defense or prosecution, including becoming a nominal party to any legal action. Unless litigation results from your use of the Proprietary Marks in a manner inconsistent with the terms of the Franchise Agreement we will reimburse you for your out-of-pocket costs.
Source: Item 13 — TRADEMARKS (FDD pages 64–65)
What This Means (2025 FDD)
According to Ben Jerrys's 2025 Franchise Disclosure Document, franchisees may be eligible for reimbursement of out-of-pocket costs related to litigation involving the Proprietary Marks, but this is conditional. Ben Jerrys will defend a franchisee against third-party claims arising from the franchisee's use of the Proprietary Marks, and will cover the cost of defense, including judgments or settlements, provided the franchisee has used the Proprietary Marks in accordance with the Franchise Agreement. The franchisee, however, is responsible for the salary costs of their own employees.
If Ben Jerrys determines that the franchisee has not used the Proprietary Marks in accordance with the Franchise Agreement, the franchisee will bear the cost of defense, including any judgment or settlement. Franchisees are obligated to execute all necessary documents and actions to facilitate the defense or prosecution of any litigation related to their use of the Proprietary Marks, including becoming a nominal party to legal action.
Unless the litigation arises from the franchisee's use of the Proprietary Marks in a manner inconsistent with the Franchise Agreement, Ben Jerrys will reimburse the franchisee for their out-of-pocket costs. This provision offers some financial protection to franchisees, but it's crucial that franchisees adhere strictly to the terms of the Franchise Agreement regarding the use of the Proprietary Marks to ensure eligibility for reimbursement.