Who has the right to control administrative proceedings or litigation involving Chatime's Trademarks?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
You must immediately notify us when you learn of the use of, or claims of right to, a trademark identical to or confusingly similar to any of the Trademarks. While we are not required to defend you against claims of infringement or unfair competition arising out of your use of the Trademarks, participate in your defense or indemnify you for expenses or damages if you are a party to an administrative or judicial proceeding involving any of the Trademarks or if the proceeding is resolved unfavorably to you, or take any other affirmative action when notified of the use of or claim of right to a trademark identical to or confusingly similar to any of the Trademarks, we will pay for the costs incurred in commencing or defending legal proceedings relating to these uses or claims if we authorize the taking of any such action. We and La Kaffa have the right to control all administrative proceedings or litigation involving the Trademarks. If we undertake the defense or prosecution of any such legal proceeding, you are required to execute any documents and do such acts as may be necessary in our counsel's opinion to carry out such defense or prosecution.
Source: Item 13 — Trademarks (FDD pages 38–40)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, both Chatime and La Kaffa have the right to control all administrative proceedings or litigation involving the Trademarks. This means that Chatime, as the franchisor, and La Kaffa, the licensor of the trademarks, jointly hold the authority to manage any legal matters pertaining to the brand's trademarks.
For a prospective Chatime franchisee, this indicates that they will not have direct control over trademark-related legal issues. Instead, Chatime and La Kaffa will manage these proceedings. However, franchisees are obligated to assist in such matters. Specifically, if Chatime undertakes the defense or prosecution of any legal proceeding related to the trademarks, the franchisee is required to execute any documents and perform any acts deemed necessary by Chatime's counsel to carry out the defense or prosecution.
This arrangement is fairly typical in franchising, where the franchisor retains control over intellectual property matters to ensure brand consistency and protection. While franchisees benefit from using established trademarks, the franchisor bears the responsibility of safeguarding these trademarks. Franchisees should be aware of their obligation to cooperate with Chatime in any legal proceedings and understand that they cannot independently contest Chatime's rights to the trademarks or trade secrets.