Who has the right to control litigation involving the Cinnaholic Marks?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Cinnaholic's 2025 Franchise Disclosure Document, Cinnaholic retains the sole right to direct and control any administrative proceeding or litigation involving the Marks, including any settlement of the proceeding. This means that Cinnaholic, not the franchisee, has the authority to make decisions regarding legal actions related to the brand's trademarks. 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 a franchisee against third-party claims arising from the franchisee's use of the Marks, provided the franchisee has used the Marks in accordance with the franchise agreement. If Cinnaholic determines the franchisee did not use the Marks in accordance with the agreement, the franchisee will bear the costs of the defense, including judgments or settlements.
In the event of litigation related to a franchisee's use of the Marks, the franchisee must execute documents and perform actions necessary for the defense or prosecution, as determined by Cinnaholic. The franchisee may be required to become a nominal party to any legal action. Cinnaholic will reimburse the franchisee's out-of-pocket costs for these actions, unless the litigation results from the franchisee's inconsistent use of the Marks with the franchise agreement. This clause ensures Cinnaholic maintains control over its brand's legal defense while outlining the franchisee's responsibilities and potential cost liabilities in trademark-related litigation.