What is a Cinnaholic franchisee obligated to do if they suspect unauthorized use of the Marks?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
Promptly notify Franchisor of any suspected unauthorized use of the Marks, any challenge to the validity of the Marks, or any challenge to Franchisor's ownership of the right of Franchisor to use and to license others to use, or Franchisee's right to use, the Marks.
Franchisee acknowledges that Franchisor has the sole right to direct and control any administrative proceeding or litigation involving the Marks, including any settlement of the proceeding.
Franchisor has the right, but not the obligation, to take action against uses by others that may constitute infringement of the Marks.
Franchisor will defend Franchisee against any third-party claim, suit, or demand arising out of Franchisee's use of the Marks.
If Franchisor, in its sole discretion, determines that Franchisee has used the Marks in accordance with this Agreement, the cost of such defense, including the cost of any judgment or settlement, will be borne by Franchisor.
If Franchisor, in its sole discretion, determines that Franchisee has not used the Marks in accordance with this Agreement, the cost of such defense, including the cost of any judgment or settlement, will be borne by Franchisee.
In the event of any litigation relating to Franchisee's use of the Marks, Franchisee will execute any and all documents and do such acts as may, in the opinion of Franchisor, be necessary to carry out such defense or prosecution, including, but not limited to, becoming a nominal party to any legal action.
Except to the extent that such litigation is the result of Franchisee's use of the Marks in a manner inconsistent with the terms of this Agreement, Franchisor agrees to reimburse Franchisee for its out-of-pocket costs in doing such acts.
Source: Item 22 — CONTRACTS (FDD pages 61–62)
What This Means (2025 FDD)
According to the 2025 Cinnaholic Franchise Disclosure Document, a franchisee is obligated to promptly notify Cinnaholic of any suspected unauthorized use of the Marks. This also includes notifying Cinnaholic of any challenge to the validity of the Marks, or any challenge to Cinnaholic's ownership of the right of Cinnaholic to use and to license others to use, or the franchisee's right to use, the Marks.
This requirement ensures that Cinnaholic can take swift action to protect its brand and trademarks. It also acknowledges that Cinnaholic has the sole right to direct and control any administrative proceeding or litigation involving the Marks, including any settlement of the proceeding. Cinnaholic also has the right, but not the obligation, to take action against uses by others that may constitute infringement of the Marks.
Cinnaholic will defend the franchisee against any third-party claim, suit, or demand arising out of the franchisee's use of the Marks if Cinnaholic determines that the franchisee has used the Marks in accordance with the Franchise Agreement. However, if Cinnaholic determines that the franchisee has not used the Marks in accordance with the agreement, the cost of such defense, including the cost of any judgment or settlement, will be borne by the franchisee.
In the event of any litigation relating to the franchisee's use of the Marks, the franchisee will execute any and all documents and do such acts as may, in the opinion of Cinnaholic, 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 the franchisee's use of the Marks in a manner inconsistent with the terms of the Franchise Agreement, Cinnaholic agrees to reimburse the franchisee for its out-of-pocket costs in doing such acts.