What are the Circle K franchisee's obligations in the event of adverse third-party claims to the marks?
Circle_K Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.5 Adverse Third-Party Claims to Marks.
If Franchisor requires Franchisee to change the Marks in response to a third party's claim, or in response to a determination by a court of competent jurisdiction that a third party's rights to use the Marks are superior to Franchisor's (or its Affiliate's) rights, then upon written instructions from Franchisor, Franchisee will, at Franchisee's expense: (A) immediately make such changes and amendments to the Marks as may be required by Franchisor; and/or (B) at the Franchised Location and in connection with all advertising, marketing and promotion of the Store, immediately cease using the Marks at issue and will, as soon as reasonably practicable, commence using the new or modified trademarks, trade names, service marks, designs, trade symbols, logos, or commercial symbols designated by Franchisor in writing.
In this limited circumstance only, Franchisor agrees to reimburse Franchisee for the cost of any new signage that Franchisor determines is necessary pursuant to this Section 4.4; provided Franchisee has cooperated with any action Franchisor undertakes with regard to the third-party claim.
Franchisee will not make any changes or amendments whatsoever to the Marks or the Business System unless directed so by Franchisor in writing.
- 4.6 Defense or Enforcement of Right to Marks.
Franchisee will have no right to and will not defend or enforce any rights associated with the Marks or the Business System in any court or other proceedings for or against imitation, infringement, any claim of prior use, or for any other claim or allegation.
Franchisee will give Franchisor prompt and timely written notice of any and all claims or complaints made against or associated with the Marks or the Business System, and Franchisee will, at its expense, cooperate in all respects with Franchisor and its Affiliates in any lawsuit or other proceedings involving the Marks or the Business System.
Franchisor or its Affiliates have the right to determine whether they will commence any action or defend any
Source: Item 22 — CONTRACTS (FDD page 100)
What This Means (2025 FDD)
According to Circle K's 2025 Franchise Disclosure Document, if a third party claims superior rights to the Circle K marks, or a court determines this to be the case, the franchisee must take specific actions. Upon written instructions from Circle K, the franchisee is obligated to immediately make any necessary changes or amendments to the marks at their own expense. Additionally, the franchisee must cease using the disputed marks at the franchised location and in all advertising, marketing, and promotion of the store. They must then promptly begin using the new or modified trademarks, trade names, service marks, designs, trade symbols, logos, or commercial symbols that Circle K designates in writing.
In this specific situation, Circle K will reimburse the franchisee for the cost of new signage that Circle K deems necessary, but only if the franchisee has cooperated with any action Circle K undertakes regarding the third-party claim. The franchisee is not allowed to make any changes or amendments to the marks or the Business System unless Circle K directs them to do so in writing.
The Circle K franchisee has no right to defend or enforce any rights associated with the marks or the Business System in any legal proceedings. Instead, the franchisee must promptly notify Circle K of any claims or complaints related to the marks or the Business System. The franchisee is also required to cooperate fully with Circle K and its affiliates in any lawsuits or other proceedings involving the marks or the Business System, at the franchisee's own expense. Circle K or its affiliates have the sole right to decide whether to initiate or defend any action.
This clause ensures that Circle K maintains control over its brand and trademarks, protecting its overall image and business system. It also highlights the importance of cooperation from the franchisee in protecting the brand's intellectual property. Franchisees should be aware of these obligations and potential costs associated with changes to signage or other materials if a third-party claim arises.