What is the C12 Group's responsibility to defend the franchisee against claims of infringement or unfair competition?
C12_Group Franchise · 2025 FDDAnswer from 2025 FDD Document
ement 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. You will ensure this by returning to C12 or destroying residual local inventory of these materials (FA Section I.7).
Source: Item 13 — TRADEMARKS (FDD pages 32–34)
What This Means (2025 FDD)
According to the 2025 C12 Group Franchise Disclosure Document, C12 Group agrees to indemnify, defend, and hold the franchisee harmless if the franchisee's use of C12 Group's trademarks, in accordance with the Franchise Agreement, infringes upon the intellectual property rights of a third party. The franchisee is required to notify C12 Group immediately upon learning of any infringement or challenge to their use of C12 Group's trademarks. This obligation is outlined in FA Section I.6 of the Franchise Agreement.
This means that if a franchisee is sued for using C12 Group's trademarks in the way that C12 Group has authorized, C12 Group will take on the responsibility of defending the franchisee in court and covering any resulting damages. This protection is a significant benefit for franchisees, as it shields them from potentially costly legal battles related to trademark infringement. However, it's important to note that this protection is contingent on the franchisee using the trademarks in accordance with the Franchise Agreement and promptly notifying C12 Group of any potential issues.
It is also important to note that C12 Group does not have a federal registration for two pending trademarks. If their right to use the trademarks is challenged, the franchisee may have to change to alternative trademarks, which may increase expenses. C12 Group states that they currently have opposition proceedings regarding their two pending trademarks and the parties are working toward a settlement agreement that would allow for the registration of both marks. The franchisor will control any litigation or proceeding which may ensue.