If Carbones Pizzeria accepts the tender of the defense, do they have the right to compromise the trademark claim?
Carbones_Pizzeria Franchise · 2025 FDDAnswer from 2025 FDD Document
We will also take reasonable steps to protect your rights to use our principal trademarks and protect you against claims of infringement or unfair competition in their use. We will indemnify you against liability to third parties resulting from claims by third parties that your use of our principal trademarks infringe upon the rights of third parties but only if such use is in accordance with the terms of the Franchise Agreement (including any requirement imposed by us to modify or discontinue the use of any name or mark and/or use one or more additional or substitute names or marks). As a condition to indemnification, you must provide notice to us of any such claim within 10 days and you must tender the defense of the claim to us. If we accept the tender of the defense, we have the right to manage the defense of the claim, including the right to compromise, settle or otherwise resolve the claim and to determine whether to appeal a final determination of the claims.
Source: Item 13 — TRADEMARKS (FDD pages 21–22)
What This Means (2025 FDD)
According to Carbones Pizzeria's 2025 Franchise Disclosure Document, if a franchisee faces a third-party claim that their use of Carbone's Pizzeria's trademarks infringes on the third party's rights, the franchisee must notify Carbones Pizzeria within 10 days and offer them the defense of the claim.
If Carbones Pizzeria accepts the defense, they have the right to manage it. This includes the right to compromise, settle, or otherwise resolve the claim. Carbones Pizzeria also has the authority to decide whether to appeal any final decisions related to the claim.
This arrangement is fairly typical in franchising, as franchisors want to maintain control over their brand's image and legal defense. However, it's important for the franchisee to provide timely notice and cooperate with Carbones Pizzeria in the defense of any such claim to ensure they are eligible for indemnification.