If Canopy Lawn Care requires a franchisee to join in an action, what expenses will they cover?
Canopy_Lawn_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
You must notify us immediately when you learn about an infringement of or challenge to your use of the Marks. We may take whatever action we deem necessary to protect the unauthorized use of the Marks and you must cooperate with us. We have the right to control any administrative proceedings or litigation involving the Marks. If we require you to join in any action, we will pay for your out-of-pocket expenses. We are not required to participate in your defense or indemnify you for expenses or damages if you are a party to an administrative or judicial proceeding involving a trademark licensed by us to you or if the proceeding is resolved unfavorably to you.
You must modify or discontinue the use of a Mark if we modify or discontinue the Mark. If this happens, we will reimburse you for your tangible out of pocket cost of compliance (for example, changing letterhead and business cards). You must not directly or indirectly contest our rights to the Marks, or any other trademarks, trade names, service marks, logos, trade secrets or business techniques that are part of our business.
Source: Item 13 — TRADEMARKS (FDD pages 41–42)
What This Means (2025 FDD)
According to Canopy Lawn Care's 2025 Franchise Disclosure Document, if Canopy Lawn Care requires a franchisee to join in an action, Canopy Lawn Care will cover the franchisee's out-of-pocket expenses. This situation typically arises when Canopy Lawn Care deems it necessary to protect the unauthorized use of their trademarks. Franchisees are obligated to cooperate with Canopy Lawn Care in such instances.
However, Canopy Lawn Care is not obligated to participate in the franchisee's defense or provide indemnification for expenses or damages if the franchisee is involved in an administrative or judicial proceeding concerning a trademark licensed to them by Canopy Lawn Care, especially if the proceeding's outcome is unfavorable to the franchisee. This clarifies that Canopy Lawn Care's financial support is limited to situations where they initiate the action to protect their trademarks, not when the franchisee is independently involved in trademark disputes.
Furthermore, if Canopy Lawn Care modifies or discontinues the use of a trademark, they will reimburse the franchisee for the tangible out-of-pocket costs of compliance, such as changing letterheads and business cards. This provision ensures that franchisees are not financially burdened by changes to Canopy Lawn Care's branding or trademarks. Franchisees must also not contest Canopy Lawn Care's rights to their trademarks, trade names, service marks, logos, trade secrets, or business techniques.