If a Cool Binz franchisee fails to notify Cool Binz of a trademark claim, what are the consequences?
Cool_Binz Franchise · 2025 FDDAnswer from 2025 FDD Document
You must notify us immediately of any apparent infringement or challenge to your use of any Mark, or of any claim by any person of any rights in any Mark, and not to communicate with any person other than us and our attorneys, and your attorneys, in any infringement, challenge, or claim.
Provided that you have timely notified us of the claim or proceeding and complied with the Franchise Agreement as we determine in our sole discretion, we shall indemnify and hold you harmless against any loss or expense incurred in connection with any such infringement, challenge or claim. If we, in our sole discretion, determine that you have not used the Marks in accordance with the Franchise Agreement, you will bear the cost of such defense, including the cost of any judgment or settlement. You must sign any and all instruments and documents, render the assistance, and do the acts and things that, in the opinion of our attorneys, may be necessary or advisable to protect and maintain our interests in any litigation or USPTO or other proceeding, or otherwise to protect and maintain our interest in the Marks, including, without limitation, becoming a nominal party to any legal action. Except to the extent that such litigation is the result of your use of the Marks in a manner inconsistent with the terms of the Franchise Agreement, we agree to reimburse you for your out-of-pocket costs in performing such acts.
Source: Item 13 — TRADEMARKS (FDD pages 49–50)
What This Means (2025 FDD)
According to Cool Binz's 2025 Franchise Disclosure Document, a franchisee's failure to promptly notify Cool Binz of any trademark claim can have significant consequences. Specifically, if a franchisee does not provide timely notification of a claim or proceeding and comply with the Franchise Agreement as Cool Binz determines in its sole discretion, Cool Binz will not indemnify or hold the franchisee harmless against any losses or expenses incurred due to the infringement, challenge, or claim. This means the franchisee could be responsible for covering all costs associated with defending against the claim.
Furthermore, if Cool Binz determines that the franchisee's use of the marks was not in accordance with the Franchise Agreement, the franchisee will bear the cost of the defense, including any judgment or settlement costs. This highlights the importance of adhering strictly to the guidelines provided by Cool Binz regarding trademark usage. The franchisee is also obligated to sign documents and provide assistance necessary to protect Cool Binz's interests in any legal proceedings related to the trademarks.
In practical terms, this means a Cool Binz franchisee must be vigilant in monitoring for any potential trademark infringements or claims. They must immediately inform Cool Binz of any such issues and follow Cool Binz's instructions and guidelines precisely. Failure to do so could result in the franchisee being financially responsible for legal defense costs and any resulting judgments or settlements, which could be substantial. This underscores the need for franchisees to understand and comply with all aspects of the Franchise Agreement related to trademark usage and notification.