Under what conditions will Better Blend defend a franchisee against trademark infringement claims?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
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, Better Blend will defend a franchisee against legal action by a third party alleging trademark infringement if the franchisee uses Better Blend's trademarks in accordance with the franchise agreement. In such cases, Better Blend will cover the expenses of the defense. Furthermore, Better Blend will indemnify the franchisee for expenses and damages if the legal action is resolved unfavorably to the franchisee.
However, the franchise agreement also stipulates that Better Blend has the right to control any administrative proceedings or litigation involving a trademark licensed to the franchisee. Better Blend does not have a federal registration for their principal trademark. Therefore, their trademark does not have as many legal benefits and rights as a federally registered trademark. If their right to use the trademark is challenged, the franchisee may have to change to an alternative trademark, which may increase their expenses.
Better Blend may also require a franchisee to modify or discontinue using a trademark, at the franchisee's expense, with a reasonable compliance period not exceeding 90 days. After this period, the franchisee loses the right to use the unmodified or discontinued trademark. It is important to note that while the trademark usage may change, the franchisee's other rights under the franchise agreement remain unaffected.