Is a Carls Jr. franchisee allowed to independently settle any controversy regarding infringement of the Proprietary Marks without written approval from the franchisor?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
gs 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. The Franchise Agreement does not contain any provisions under which we are required to defend or indemnify you against any claims of infringement or unfair competition arising out of your use of the Proprietary Marks.
Source: Item 13 — TRADEMARKS (FDD pages 56–58)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, a franchisee is not allowed to independently settle any controversy regarding infringement of the Proprietary Marks without written approval from Carls Jr. The franchisee must promptly inform Carls Jr. in writing regarding any infringement of the Proprietary Marks of which they are aware.
Carls Jr. retains the right, but not the obligation, to bring an action to prevent any infringement and to include the franchisee in any action in which they are or may be a party. The Franchise Agreement does not require Carls Jr. to defend or indemnify the franchisee against claims of infringement arising out of the franchisee's use of the Proprietary Marks.
The franchisee must notify Carls Jr. immediately if any litigation involving their Proprietary Marks is instituted or threatened against them and must fully cooperate in defending or settling the litigation. The franchisee may not directly or indirectly contest the validity or ownership of the Proprietary Marks. This is a fairly standard clause in franchise agreements, as the franchisor needs to maintain control over its brand and trademarks.