What action is a Carls franchisee prohibited from taking regarding infringement of Proprietary Marks without prior written approval from the franchisor?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
e no pending infringement, opposition or cancellation proceedings or material litigation involving the Principal Trademarks. There are no agreements currently in effect that significantly limit our right to use or license the use of the Principal Trademarks in any manner material to you. We do not know of either superior prior rights or infringing uses that could materially affect your use of the Principal Trademarks in any state.
You must promptly inform us in writing regarding any infringement of the Proprietary Marks of which you are aware. You may not make any demand or serve any notice, orally or in writing, or institute any legal action or negotiate, compromise or settle any controversy with respect to any infringement without first obtaining our written approval. We will have the right, but not the obligation, to bring an action or take those steps we consider advisable to prevent any such infringement and to join you as a party to any
action in which we are or may be a party and as to which you are or would be a necessary or proper party.
Source: Item 13 — TRADEMARKS (FDD pages 56–58)
What This Means (2024 FDD)
According to the 2024 Carls FDD, a franchisee is prohibited from taking certain actions regarding infringement of the Proprietary Marks without first obtaining written approval from Carls. Specifically, a franchisee cannot make any demand or serve any notice, either orally or in writing, or start any legal action. They also cannot negotiate, compromise, or settle any controversy related to infringement without Carls's prior written approval. This ensures that Carls maintains control over how its trademarks are defended and protected.
This requirement means that if a Carls franchisee becomes aware of potential trademark infringement, they must immediately notify Carls in writing. However, they cannot independently take any action to address the infringement. Carls retains the right, but not the obligation, to take action to prevent infringement and can include the franchisee in any legal proceedings.
This provision is fairly standard in franchising, as franchisors typically want to control the defense of their trademarks to ensure consistency and protect the brand's reputation. It is important for prospective Carls franchisees to understand that they must rely on Carls to take appropriate action in cases of infringement and cannot act independently without written consent. This also means that Carls is not required to defend or indemnify franchisees against infringement claims arising from the franchisee's use of the Proprietary Marks.