Is Burros Fries liable for consequential damages resulting from trademark claims?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
shall in our sole discretion decide on the appropriate action to be taken. Any unsuccessful challenge made by us shall not constitute a ground for the termination of this Agreement. In the event we determine in our sole judgment that challenging any such third party's use of the Marks will not likely be successful, or would not be economically feasible to achieve, or if Franchisee shall be required to cease using the Marks (or any of them) by court order, or as a result of any settlement of any such trademark claim by a prior registrant or any pre-existing user, or any other such trademark claim, or if we shall deem it necessary or appropriate to change the name of the Franchise in order to mitigate any potential exposure or damages arising under any trademark claim, Franchisee shall promptly change the name of its Franchise, and thereafter utilize an alternative name established by us. We shall not otherwise be liable for any losses or any consequential damages, incidental damage, exemplary damages, special damages, including lost future profits, resulting from or arising out of any trademark service mark, and/or unfair competition claim(s).
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to Burros Fries' 2024 Franchise Disclosure Document, Burros Fries will not be liable for consequential damages resulting from trademark claims. Specifically, if a franchisee is required to change the name of their franchise due to a trademark claim, or if Burros Fries deems it necessary to change the franchise name to mitigate potential damages, Burros Fries will not be liable for any resulting losses.
This includes consequential damages, incidental damage, exemplary damages, special damages, and lost future profits. Additionally, Burros Fries has no obligation to reimburse the franchisee for any costs, causes of action, damages, expenses, fines, liabilities, or penalties arising from a trademark, service mark, logo, or trade name change.
This clause protects Burros Fries from significant financial liabilities related to trademark disputes. However, the franchisee bears the full financial burden of rebranding or other changes necessitated by trademark issues. Prospective franchisees should carefully consider this allocation of risk and potentially seek legal counsel to understand their obligations and potential costs in the event of a trademark-related issue.