Is Churchs Chicken obligated to defend a franchisee against claims of copyright infringement?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
You must promptly notify us of any suspected infringement of, or challenge to, the copyright. We will control any administrative proceeding or litigation involving the copyright and will decide whether to pursue any suspected infringer. If we defend or begin litigation relating to the copyright, you must sign all documents and do what our counsel believes is necessary to carry out the defense or prosecution. Unless the litigation arises as a result of your use of the copyright in a manner inconsistent with the Franchise Agreement, we will reimburse you for your out-of-pocket costs in doing these things (except that you will still bear the salary costs of your employees). Otherwise, we are not obligated by the Franchise Agreement, or otherwise, to defend the rights granted to you to use the copyright or to defend you against claims of infringement or unfair competition. Nevertheless, it is ordinarily in our best interest to do so.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 47–49)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, Churchs Chicken is generally not obligated to defend a franchisee against claims of copyright infringement. However, there is an exception. If the litigation arises due to the franchisee's use of the copyright in a manner consistent with the Franchise Agreement, Churchs Chicken will reimburse the franchisee for their out-of-pocket costs in defending the litigation. The franchisee will still bear the salary costs of their employees.
This means that if a franchisee is sued for copyright infringement, Churchs Chicken's support will depend on how the franchisee was using the copyright. If the franchisee followed the Franchise Agreement, Churchs Chicken will cover the franchisee's out-of-pocket expenses. This could include attorney fees, court costs, and other direct costs associated with the lawsuit. However, the franchisee will be responsible for paying their own employees' salaries during the litigation.
It is important to note that Churchs Chicken retains control over any litigation involving the copyright. The franchisee is required to sign all documents and take actions deemed necessary by Churchs Chicken's counsel to carry out the defense. While Churchs Chicken is not obligated to defend the rights granted to the franchisee to use the copyright, the FDD states that it is ordinarily in Churchs Chicken's best interest to do so.
Prospective franchisees should carefully consider this provision and discuss it with their legal counsel. Understanding the circumstances under which Churchs Chicken will provide support in a copyright infringement case is crucial for assessing the potential risks and costs associated with operating a Churchs Chicken franchise.