Who has the right to control litigation involving a trademark licensed by Chocolate Fish Coffee?

According to Chocolate Fish Coffee's 2024 Franchise Disclosure Document, Chocolate Fish Coffee retains the right to control any administrative proceedings or litigation involving a trademark that it licenses to its franchisees. This means that if a legal dispute arises concerning the use of a Chocolate Fish Coffee trademark by a franchisee, Chocolate Fish Coffee, not the franchisee, will direct the legal strategy and make decisions regarding the litigation.

This control extends to both administrative proceedings and court litigation. However, the franchise agreement obligates franchisees to notify Chocolate Fish Coffee 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 Fish Coffee is not required to take any action upon receiving such notification.

Furthermore, Chocolate Fish Coffee will defend the franchisee (at Chocolate Fish Coffee's expense) against any legal action by a third party alleging trademark infringement, provided the franchisee uses the trademarks in accordance with the franchise agreement. Chocolate Fish Coffee will also indemnify the franchisee for expenses and damages if the legal action is resolved unfavorably to the franchisee. This protection is contingent upon the franchisee's adherence to the franchise agreement in their use of the trademarks.

This arrangement is fairly typical in franchising, as franchisors need to protect their brand's trademarks. By retaining control over trademark litigation, Chocolate Fish Coffee can ensure consistent legal strategies and protect the overall brand integrity. Franchisees benefit from this arrangement through the franchisor's commitment to defend and indemnify them in trademark disputes, provided they adhere to the franchise agreement.