Who controls litigation arising from any infringement of Chesters' trademarks?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
The Agreement does not require us to protect your right to use the Marks listed above or to protect you against claims of infringement or unfair competition from your use of the Marks. You have no contractual obligation to notify us of any apparent infringement or challenge to your use of any Mark or of any person's claim of any rights in any Mark. In all these cases, we have the right to take the action we deem appropriate (including no action). Because we own the Marks, we would expect to control exclusively any litigation, USPTO proceeding, or other administrative proceeding arising from any infringement, challenge, or claim. We have no obligation to participate in your defense and/or indemnify you for expenses or damages if you are a party to an administrative or judicial proceeding involving a Mark we license to you or if the proceeding is resolved unfavorably toward you. You must cooperate with us in defending or settling litigation. Our Agreement does not address our right to change the Marks during the franchise term.
Source: Item 13 — TRADEMARKS (FDD pages 31–33)
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, Chesters retains the exclusive right to control any litigation, USPTO proceeding, or other administrative proceeding resulting from infringement, challenge, or claim against its trademarks. While franchisees are obligated to cooperate with Chesters in defending or settling litigation, Chesters is not obligated to participate in the franchisee's defense or indemnify them for expenses or damages if the franchisee is involved in an administrative or judicial proceeding involving a licensed mark, especially if the proceeding is resolved unfavorably for the franchisee.
This means that as a Chesters franchisee, you do not have the right to independently pursue legal action against parties infringing on Chesters' trademarks. Chesters maintains full authority over such matters. While you must cooperate with Chesters in any litigation, Chesters is not required to financially support your defense or cover any damages you incur if you are a party in a legal proceeding related to the trademarks.
This arrangement is typical in franchising, as the franchisor owns the trademarks and must protect their brand standards and reputation. However, it's important for a prospective Chesters franchisee to understand that while they benefit from using the established trademarks, they also relinquish control over legal actions related to those trademarks and may not receive financial support from Chesters in case of litigation.