Who has the right to control litigation arising from trademark infringement related to Budget?
Budget Franchise · 2025 FDDAnswer from 2025 FDD Document
Budget will have sole discretion to take such action as it deems appropriate and the right to control exclusively any litigation or administrative proceeding arising out of any such infringement, challenge or claim or otherwise relating to any Mark.
Licensee shall execute any documents, render such assistance and do such acts and things as may, in the opinion of counsel for Budget, be necessary or advisable to protect the interest of Budget in any such litigation or proceeding or to otherwise protect the interest of Budget in the Marks.
Budget will indemnify, defend and hold harmless Licensee from any third party damages suffered by Licensee in any such litigation or proceeding arising from Licensee's proper use of any Mark, and Budget may resolve the matter by obtaining a license for Licensee at Budget's expense, or by requiring that Licensee discontinue using the infringing mark or modify Licensee's use of such mark to avoid infringing the rights of any third party.
Source: Item 23 — RECEIPTS (FDD pages 80–426)
What This Means (2025 FDD)
According to Budget's 2025 Franchise Disclosure Document, Budget retains sole discretion to manage any legal proceedings related to trademark infringements, challenges, or claims concerning its marks. This authority extends to any litigation or administrative actions that arise. The franchisee is obligated to notify Budget immediately in writing of any potential infringement or challenges to the use of any Mark. The franchisee must refrain from communicating with any party other than Budget and its counsel regarding such matters.
Budget also requires the franchisee to execute documents and provide assistance deemed necessary by Budget's counsel to protect Budget's interests in any related litigation or proceedings. In return, Budget will indemnify, defend, and hold the franchisee harmless from third-party damages incurred by the franchisee in litigation or proceedings arising from the franchisee's proper use of any Mark. Budget has the option to resolve the matter by securing a license for the franchisee at Budget's expense or by directing the franchisee to discontinue using the infringing mark or modify its use to avoid infringing third-party rights.
This arrangement means that while Budget franchisees are expected to be vigilant in protecting Budget's trademarks and to cooperate fully in any legal defense, they do not have the autonomy to direct the legal strategy or make independent decisions regarding trademark litigation. This centralized control allows Budget to maintain a consistent legal approach and protect the overall brand integrity. Franchisees benefit from Budget's commitment to cover costs and damages arising from their proper use of the trademarks, providing a degree of financial security in the event of legal challenges.