Does Better Blend have an obligation to take action when notified of similar trademark uses or claims?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
The franchise agreement obligates you to notify us of the use of, or claims of rights to, a trademark identical to or confusingly similar to a trademark licensed to you. The franchise agreement does not require us to take affirmative action when notified of these uses or claims. We have the right to control any administrative proceedings or litigation involving a trademark licensed by us to you.
If you use our trademarks in accordance with the franchise agreement, then (i) we will defend you (at our expense) against any legal action by a third party alleging infringement by your use of the trademark, and (ii) we will indemnify you for expenses and damages if the legal action is resolved unfavorably to you.
Under the franchise agreement, we may require you to modify or discontinue using a trademark, at your expense. You will have a reasonable period of time to comply with the change, not to exceed 90 days. After such period, you would no longer have the right to use the unmodified or discontinued trademark. Your rights under the franchise agreement do not change, other than the modification or discontinuation of the trademark.
Source: Item 13 — TRADEMARKS (FDD pages 29–31)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, franchisees are obligated to notify Better Blend of any use of, or claims to, a trademark that is identical or confusingly similar to the trademarks licensed to them. However, Better Blend is not required to take any action upon receiving such a notification. Better Blend retains the right to control any administrative proceedings or litigation involving a trademark licensed to its franchisees.
This means that while franchisees are responsible for informing Better Blend about potential trademark issues, Better Blend has the discretion to decide how to respond. Better Blend is not obligated to pursue legal action or take other steps to protect the trademark. This could leave franchisees in a vulnerable position if a trademark infringement occurs and Better Blend chooses not to act.
Better Blend does state that if franchisees use Better Blend's trademarks in accordance with the franchise agreement, Better Blend will defend the franchisee (at Better Blend's expense) against any legal action by a third party alleging infringement. Better Blend will also indemnify the franchisee for expenses and damages if the legal action is resolved unfavorably to the franchisee. However, Better Blend may require the franchisee to modify or discontinue using a trademark, at the franchisee's expense, with a reasonable compliance period not exceeding 90 days.