What actions must a Cinnaholic franchisee take in the event of litigation relating to the use of the mark?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
You must notify us immediately when you learn about an infringement of or challenge to your use of a Mark. We will take the action we think appropriate. We have the right to exclusively control any litigation, USPTO proceeding, or other proceeding arising out of any infringement, challenge, or claim or otherwise relating to any Mark.
You must notify us promptly of any unauthorized use of the Mark of which you have knowledge or of any challenge to the validity of our ownership of or our right to license others to use the Mark. We will take the action, if any, we believe to be appropriate. We have the right, but no obligation, to initiate, direct, and control any litigation or administrative proceeding relating to the Mark, including, but not limited to, any settlement. We will be entitled to retain any and all proceeds, damages, and other sums, including attorneys' fees, recovered or owed to us or our affiliates in connection with any such action. You must execute all documents and, render any other assistance we may deem necessary to any such proceeding or any effort to maintain the continued validity and enforceability of the Mark. We will defend you against any third party claim, suit, or demand arising out of your use of the Mark. If we, in our sole discretion, determine that you have used the Mark in accordance with the Franchise Agreement, the cost of such defense and the cost of any judgment or settlement, will be borne by us. If we, in our sole discretion, determine that you have not used the Mark in accordance with the Franchise Agreement, those costs will be borne by you. In the event of any litigation relating to your use of the Mark, you will do such acts as may, in our opinion, be necessary to carry out such defense or prosecution, including becoming a nominal party to any legal action. Except to the extent that such litigation is the result of your use of the Mark in a manner inconsistent with the terms of the Franchise Agreement or the Manuals, we agree to reimburse you for your out-of-pocket costs in doing such acts.
You must modify or discontinue the use of a Mark and you must adopt or use additional or substituted marks, if we instruct you to do so. If this happens, you are responsible for your tangible costs of compliance (i.e. changing signs) and we do not have to reimburse you for any loss of revenue due to any modified or discontinued Mark, or for your expenses of promoting a modified or substitute Mark. You waive any claim against us for changing, modifying, or discontinuing a Mark. We may also develop or acquire additional Marks and make them available for your use.
Source: Item 13 — TRADEMARKS (FDD pages 37–39)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, if a franchisee faces litigation related to the use of Cinnaholic's trademarks, they must perform specific actions. The franchisee is required to notify Cinnaholic immediately if they become aware of any unauthorized use of the mark or any challenges to the validity of Cinnaholic's ownership of the mark. Cinnaholic will then decide what action, if any, it deems appropriate to take.
In the event of litigation, the franchisee must take actions that Cinnaholic considers necessary for the defense or prosecution of the case, potentially including becoming a nominal party in the legal action. The franchisee is obligated to execute all documents and provide any assistance Cinnaholic deems necessary to maintain the validity and enforceability of the mark. Unless the litigation results from the franchisee's unauthorized use of the mark, Cinnaholic will reimburse the franchisee for reasonable out-of-pocket costs incurred while assisting with the legal proceedings.
Cinnaholic retains the right to control any litigation or proceedings related to the trademarks, including settlements, and is entitled to all proceeds, damages, and attorneys' fees recovered. The franchisee must also modify or discontinue the use of a mark and adopt substitute marks if instructed by Cinnaholic. However, the franchisee is responsible for the tangible costs of compliance, such as changing signs, and will not be reimbursed for any loss of revenue or expenses related to promoting a modified or substitute mark. Franchisees waive any claims against Cinnaholic for changing, modifying, or discontinuing a mark.