If Carbones Pizzeria accepts the tender of the defense, do they have the right to settle 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 the 2025 FDD, if a franchisee of Carbones Pizzeria faces a third-party claim that their use of the Carbone's Pizzeria trademarks infringes on the third party's trademark rights, the franchisee must notify Carbones Pizzeria within 10 days of receiving the claim and tender the defense of the claim to them.
If Carbones Pizzeria accepts the defense, they have the right to manage the defense of the claim. This includes the right to compromise, settle, or otherwise resolve the claim. Carbones Pizzeria also has the right to determine whether to appeal a final determination of the claims.
This means that while the franchisee is required to notify Carbones Pizzeria of any potential trademark infringement claims, Carbones Pizzeria retains control over the legal strategy and decisions related to resolving such claims, including the decision to settle.