Does Burros Fries have an obligation to reimburse the franchisee for costs arising out of a trademark change?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee acknowledges that there may be third party pre-existing users or applicants/registrants of trademarks, trade names, or business names similar to the Names and Marks. We and Franchisee shall investigate such use, applications, or registrations, if any, and we 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). We shall have no obligation to reimburse the Franchisee for any costs, causes of action, damages, demands, expenses, fines, liabilities, or penalties, arising out of such a trademark, service mark, logo or trade name change.
Source: Item 22 — CONTRACTS (FDD page 53)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, Burros Fries is not obligated to reimburse franchisees for any costs, damages, or expenses resulting from a trademark, service mark, logo, or trade name change.
Specifically, Burros Fries retains the sole discretion to decide on actions regarding third-party uses or registrations of similar trademarks. If Burros Fries deems challenging a third party's use of the marks unlikely to succeed or economically unfeasible, or if the franchisee is required by court order to cease using the marks, or if Burros Fries deems it necessary to change the franchise name to mitigate potential damages from a trademark claim, the franchisee must promptly change the name of its franchise to an alternative name established by Burros Fries.
Burros Fries explicitly states that it will not be liable for any losses or damages, including consequential, incidental, exemplary, or special damages, such as lost future profits, resulting from trademark-related claims. Furthermore, 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 means a Burros Fries franchisee bears the financial risk of rebranding should a trademark issue arise.