Is Burros Fries Franchise, Inc. obligated to protect a franchisee's right to use the Marks?

According to the 2024 Burros Fries Franchise Disclosure Document, Burros Fries is not contractually obligated to protect the Marks or a franchisee's right to use them. However, as a matter of corporate policy, Burros Fries intends to defend the Marks vigorously. The FDD specifies that Burros Fries will control all litigation, arbitration, and mediation involving the Marks, and the franchisee has no authority to institute any such actions or enter into settlement negotiations.

This means that while Burros Fries states an intention to defend its trademarks, it is not legally bound to do so. This could present a risk to franchisees if the brand's trademarks are infringed upon by a third party, as the franchisee has no direct recourse and must rely on Burros Fries to take action. If Burros Fries chooses not to act, the franchisee's business could be negatively impacted.

In the franchise agreement, the franchisee acknowledges that Burros Fries has established substantial goodwill and business value in its Names and Marks, expertise, and System. The franchisee also agrees to follow all of Burros Fries's quality standards that are inherent in the Names and Marks, as outlined in the Operations Manual and other policy statements. This highlights the importance of maintaining brand standards to uphold the value of the trademarks.

Prospective franchisees should carefully consider this lack of contractual obligation and assess the potential risks associated with trademark infringement. It would be prudent to discuss this matter further with Burros Fries to understand the circumstances under which they would actively defend the Marks and what support a franchisee could expect in such situations.