Who has the right to control legal proceedings involving a Bombs Away trademark licensed to a franchisee?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 13 — TRADEMARKS (FDD pages 24–25)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, Bombs Away retains the right to control any administrative proceedings or litigation involving a trademark that it licenses to a franchisee. This means that if a legal issue arises concerning the use of Bombs Away's trademarks by a franchisee, Bombs Away, not the franchisee, will direct the legal strategy and make decisions regarding the proceedings.
This control is significant for prospective Bombs Away franchisees because it means they will not have autonomy over legal matters pertaining to the brand's trademarks. While Bombs Away will defend and indemnify franchisees against infringement claims arising from their use of the trademarks in accordance with the franchise agreement, the franchisee must notify Bombs Away of any potential trademark issues. Bombs Away does not have to take action when notified.
This arrangement is fairly common in franchising, as franchisors typically want to maintain uniform brand standards and protect their intellectual property. By retaining control over trademark litigation, Bombs Away can ensure consistent legal positions and strategies are pursued, which can protect the overall brand. However, it also means that franchisees must rely on Bombs Away's expertise and judgment in these matters, and they may not have the ability to pursue legal strategies that they believe are in their best interest.
It is important for prospective franchisees to understand that Bombs Away may require them to modify or discontinue using a trademark, at the franchisee's expense. Franchisees should carefully review the franchise agreement to fully understand their obligations and the extent of Bombs Away's control over trademark-related legal issues.