Under what condition will Cinnaholic defend a franchisee against claims arising from the use of the mark?
Cinnaholic Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 13 — TRADEMARKS (FDD pages 37–39)
What This Means (2025 FDD)
According to Cinnaholic's 2025 Franchise Disclosure Document, Cinnaholic will defend a franchisee against third-party claims, suits, or demands arising from the franchisee's use of the Cinnaholic mark, provided the franchisee has used the mark in accordance with the Franchise Agreement. If Cinnaholic determines, in its sole discretion, that the franchisee has used the mark according to the Franchise Agreement, Cinnaholic will bear the costs of the defense and any resulting judgment or settlement.
However, if Cinnaholic determines that the franchisee has not used the mark in accordance with the Franchise Agreement, the franchisee will be responsible for all costs associated with the defense. In any litigation related to the use of the mark, the franchisee must perform all actions deemed necessary by Cinnaholic to carry out the defense or prosecution, potentially including becoming a nominal party to any legal action. Cinnaholic will reimburse the franchisee for reasonable out-of-pocket costs incurred while assisting with the defense, unless the litigation results from the franchisee's inconsistent use of the mark as per the Franchise Agreement or Manuals.
This arrangement is fairly typical in franchising, where the franchisor controls the brand's trademarks and wants to ensure consistent usage. By adhering to the Franchise Agreement and Cinnaholic's operational guidelines, a franchisee can expect Cinnaholic to stand behind them in case of trademark-related legal challenges. Conversely, franchisees bear the risk of legal costs if they deviate from approved usage, highlighting the importance of following the franchisor's instructions and guidelines.