What is the C12 Group's obligation to protect a franchisee's right to use the trademarks?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
franchisor will control any litigation or proceeding which may ensue.
The franchisor must protect the franchisee's right to use the trademarks and must protect the franchisee against claims of infringement or unfair competition arising from the franchisee's use of them. WE agree to indemnify, defend, and hold you harmless in the event that your use of C12's trademarks in accordance with the Franchise Agreement infringes upon the intellectual property rights of a third party. You agree to notify C12 immediately when you learn of an infringement or challenge to your use of any of our trademarks (FA Section I.6).
You will not directly or indirectly contest our right to, or use of, our trademarks, trade secrets, or proprietary materials and processes that are part of our business format.
If this Agreement is terminated, you agree to immediately cease using C12's trade name, trademarks, service marks, symbols, or insignia, or any proprietary materials, forms, bulletins, advertising materials, slogans, manuals, or websites which relate to the name and marks listed in this Agreement.
Source: Item 13 — TRADEMARKS (FDD pages 32–34)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, C12 Group has an obligation to protect a franchisee's right to use its trademarks. C12 Group must defend franchisees against claims of infringement or unfair competition that arise from the franchisee’s authorized use of C12 Group's trademarks. C12 Group agrees to indemnify and hold the franchisee harmless if the franchisee's use of the trademarks, in accordance with the Franchise Agreement, infringes upon a third party's intellectual property rights. The franchisee, in turn, is obligated to notify C12 Group immediately if they become aware of any infringement or challenge to their use of C12 Group's trademarks.
However, the FDD also states that C12 Group does not have a federal registration for two pending trademarks. This means that these trademarks do not have as many legal benefits and rights as a federally registered trademark. If the right to use these trademarks is challenged, the franchisee may have to change to alternative trademarks, which may increase their expenses. C12 Group also states that there are currently opposition proceedings regarding their two pending trademarks, but the parties are working toward a settlement agreement that would allow for the registration of both marks.
This obligation is fairly standard in franchising, as the franchisor typically owns the trademarks and licenses them to franchisees. Franchisees are generally required to use the trademarks in an approved manner and to notify the franchisor of any potential infringement. The franchisor's obligation to defend and indemnify the franchisee provides some protection against legal claims, but the franchisee should still be aware of the risks associated with using trademarks that are not fully protected, as is the case with C12 Group's pending trademarks.