Is Benihana obligated under the Franchise Agreement to protect franchisees against claims of trademark infringement or unfair competition related to the Marks?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
We are not obligated by the Franchise Agreement to protect any rights granted to you to use the Marks or to protect you against claims of infringement or unfair competition with respect to them. We have the right, but not the obligation, under the Franchise
Agreement to protect you against claims of infringement or unfair competition arising out of your use of the Marks. You must notify us of the use of, or claims of rights to, a trademark identical to or confusingly similar to the Marks. We are not obligated to indemnify you against or to reimburse you for any damages for which you may be held liable in any proceeding arising out of the use of the names or Marks or any costs incurred in the defense of any such claim.
Source: Item 13 — TRADEMARKS (FDD pages 49–55)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, Benihana is not obligated by the Franchise Agreement to protect franchisees' rights to use the Marks or to defend them against claims of infringement or unfair competition. However, Benihana has the right, but not the obligation, to protect franchisees against such claims arising from the use of the Marks.
Franchisees are required to notify Benihana of any use of, or claims of rights to, a trademark that is identical or confusingly similar to the Marks. Despite this notification requirement, Benihana is not obligated to indemnify franchisees or reimburse them for any damages they may be liable for in any proceeding arising out of the use of the names or Marks, including any costs incurred in defending such claims.
This means that as a Benihana franchisee, you bear the risk of trademark infringement or unfair competition claims related to your use of the Benihana Marks. While Benihana may choose to assist in such cases, it is not legally bound to do so, and you are responsible for any associated costs or damages. This is a significant risk factor to consider, as legal battles over trademarks can be expensive and time-consuming.