Under what conditions will Chocolate Bash defend a franchisee against trademark infringement claims?

According to Chocolate Bash's 2024 Franchise Disclosure Document, Chocolate Bash will defend a franchisee against legal action by a third party alleging trademark infringement if the franchisee uses Chocolate Bash's trademarks in accordance with the franchise agreement. In such cases, Chocolate Bash will cover the expenses of defending the franchisee. Furthermore, if the legal action is resolved unfavorably to the franchisee, Chocolate Bash will indemnify the franchisee for expenses and damages.

However, the franchise agreement also stipulates that Chocolate Bash may require the franchisee to modify or discontinue using a trademark, and the franchisee will bear the expense of doing so. Franchisees are obligated to notify Chocolate Bash of any use of, or claims of rights to, a trademark that is identical or confusingly similar to the trademarks licensed to them. It is important to note that Chocolate Bash is not obligated to take any affirmative action upon receiving such notification.

This arrangement is fairly typical in franchising, where the franchisor retains control over its trademarks but also provides some level of protection to franchisees operating under those trademarks. Prospective Chocolate Bash franchisees should carefully review the franchise agreement to fully understand their rights and obligations regarding trademark use and potential infringement claims. Franchisees should also be aware that Chocolate Bash has the right to control any administrative proceedings or litigation involving a trademark licensed to them.