Under what conditions will Churchs Chicken reimburse a franchisee's out-of-pocket costs related to copyright litigation?
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 will reimburse a franchisee's out-of-pocket costs related to copyright litigation under specific conditions. If litigation arises from the franchisee's use of the copyright in a manner consistent with the Franchise Agreement, Churchs Chicken will cover the franchisee's out-of-pocket expenses incurred while cooperating with the litigation. However, this reimbursement excludes the salary costs of the franchisee's employees.
This means that if a franchisee is sued for copyright infringement while using Churchs Chicken's copyrighted materials as intended and in accordance with the franchise agreement, Churchs Chicken will cover expenses like attorney fees and court costs. This protection is a significant benefit for franchisees, as it shields them from potentially substantial legal costs associated with copyright disputes.
However, it's important to note the exception: if the copyright litigation arises because the franchisee used the copyright in a way that violates the Franchise Agreement, Churchs Chicken is not obligated to reimburse the franchisee's costs. Additionally, the franchisee remains responsible for the salary costs of their employees, even if the other litigation costs are reimbursed. Churchs Chicken retains control over any administrative proceeding or litigation involving the copyright and decides whether to pursue any suspected infringer.