Under what conditions will Bombs Away Franchising defend a franchisee against a third-party action alleging trademark infringement?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
12.3 Infringement.
- (a) Defense of Franchisee. If Franchisee has used the Marks in accordance with this Agreement, then (i) Bombs Away Franchising shall defend Franchisee (at Bombs Away Franchising's expense) against any Action by a third-party alleging infringement by Franchisee's use of a Mark, and (ii) Bombs Away Franchising will indemnify Franchisee for expenses and damages if the Action is resolved unfavorably to Franchisee.
- (b) Infringement by Third Party. Franchisee shall promptly notify Bombs Away Franchising if Franchisee becomes aware of any possible infringement of a Mark by a third party. Bombs Away Franchising may, in its sole discretion, commence or join any claim against the infringing party.
- (c) Control. Bombs Away Franchising shall have the exclusive right to control any prosecution or defense of any Action related to possible infringement of or by the Marks.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, Bombs Away Franchising will defend a franchisee against a third-party action alleging trademark infringement if the franchisee has used the marks in accordance with the franchise agreement. In such a case, Bombs Away will defend the franchisee at its own expense. Furthermore, Bombs Away will indemnify the franchisee for expenses and damages if the action is resolved unfavorably to the franchisee.
This protection is contingent upon the franchisee's adherence to the guidelines and stipulations outlined in the franchise agreement regarding the use of Bombs Away's trademarks. This underscores the importance of franchisees strictly following the franchisor's instructions and rules for trademark usage to maintain this protection. Failing to adhere to these guidelines could leave the franchisee vulnerable to legal action without the franchisor's support.
Bombs Away retains exclusive control over any legal defense or prosecution related to potential trademark infringement. The franchisee is obligated to promptly inform Bombs Away of any suspected infringement by a third party. This allows Bombs Away to take appropriate action to protect its trademarks and brand. This clause highlights the importance of franchisees maintaining vigilance over the brand's trademarks and acting as an extension of the brand protection efforts of Bombs Away.