If a franchisee is sued for trademark infringement, is Counselor Realty required to defend them?

According to Counselor Realty's 2025 Franchise Disclosure Document, Counselor Realty is not obligated to defend a franchisee against claims of trademark infringement or unfair competition. The FDD states that Counselor Realty reserves the sole discretion to determine what steps, if any, are taken in instances of unauthorized use or infringement of its marks. Counselor Realty also maintains complete control of any litigation or settlement connected to claims of infringement, unfair competition, or unauthorized use of its marks.

This means that if a franchisee is sued for using Counselor Realty's trademarks improperly, Counselor Realty is not required to provide legal defense or cover legal costs. The franchisee would likely be responsible for their own legal representation and any associated expenses. This is a significant risk for franchisees, as trademark litigation can be costly and time-consuming.

Typically, franchisors will offer some level of support or defense to franchisees in trademark infringement cases, especially if the franchisee has been using the trademarks as directed by the franchisor. The fact that Counselor Realty explicitly states it is not obligated to protect franchisees in such cases is something a potential franchisee should carefully consider. It is important to discuss this point with Counselor Realty during the due diligence process to fully understand the potential liabilities and insurance coverage options available.