Who has the right to defend an 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 brought against a franchisee relating to the Marks (trademarks and service marks). The franchisee is obligated to promptly notify City Wide of any such action within ten calendar days of receiving notice. This ensures City Wide can control the defense and protect its brand.
This provision is crucial for maintaining brand consistency and protecting the overall value of the City Wide brand. By centralizing the defense of trademark-related claims, City Wide can ensure a uniform legal strategy and avoid inconsistent outcomes that could damage the brand's reputation. Franchisees benefit from this arrangement because they are not solely responsible for the potentially significant costs and complexities of trademark litigation.
Furthermore, the franchisee is required to cooperate with City Wide in any defense or prosecution of litigation related to the Marks, including executing documents and taking necessary actions as directed by City Wide's counsel. This collaboration ensures that City Wide has the full support of the franchisee in protecting the Marks. City Wide also has 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.
However, City Wide makes no representation or warranty regarding the use, exclusive ownership, validity, or enforceability of the Marks. This means that while City Wide will defend actions against franchisees, it does not guarantee the strength or exclusivity of the trademarks themselves. A prospective franchisee should consider this when evaluating the risks associated with the franchise.