Who has the right to defend any action against a City Wide franchisee relating to the Marks?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee will notify CITY WIDE of any action, claim or demand against Franchisee relating to the Marks, within ten (10) calendar days after Franchisee receives notice of any action, claim, or demand.
Upon receipt of a timely notice of an action, claim or demand against Franchisee relating to the Marks, CITY WIDE will have the sole and absolute right to defend any such action.
CITY WIDE will have the exclusive right to contest or bring action against any third party regarding the third party's use of any of the Marks and will exercise such right at its sole and absolute right.
In any defense or prosecution of any litigation relating to the Marks or components of the System undertaken by CITY WIDE, Franchisee will cooperate with CITY WIDE and execute any documents and take all actions as may be desirable or necessary in the opinion of CITY WIDE's counsel, to conduct such defense or prosecution.
Both parties will make every effort consistent with the foregoing to protect, maintain, and promote the Marks as identifying the System.
CITY WIDE MAKES NO REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, AS TO THE USE, EXCLUSIVE OWNERSHIP, VALIDITY OR ENFORCEABILITY OF THE MARKS.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, City Wide maintains the sole and absolute right to defend any action, claim, or demand against a franchisee relating to the Marks, provided they receive timely notification from the franchisee. The franchisee is obligated to notify City Wide of any such action, claim, or demand within ten calendar days of receiving notice.
This clause ensures that City Wide can control the defense of its trademarks, maintaining consistency and protecting the brand's integrity. It also requires the franchisee to cooperate with City Wide in any litigation related to the Marks, including executing necessary documents and actions as deemed necessary by City Wide's counsel.
While City Wide retains the right to defend trademark-related actions, they make no guarantees regarding the use, exclusive ownership, validity, or enforceability of the Marks. This means that franchisees bear some risk regarding the strength and defensibility of the trademarks they are licensed to use. Franchisees are expected to actively protect and promote the Marks, but ultimate control over legal defense rests with City Wide.
This arrangement is fairly typical in franchising, where the franchisor needs to protect its brand standards and reputation. However, the franchisee should be aware that they must promptly report any potential trademark issues to City Wide and cooperate fully in any resulting legal actions.