Can CNS Franchising change the 'Marks' that a Crab N Spice franchisee is required to use?
Crab_N_Spice Franchise · 2024 FDDAnswer from 2024 FDD Document
"Marks" means the trade name and logo contained on the Summary Page, and all other trade names, trademarks, service marks and logos specified by CNS Franchising from time to time for use in a Crab N Spice business.
12.2 Change of Marks. CNS Franchising may add, modify, or discontinue any Marks to be used under the System. Within a reasonable time after CNS Franchising makes any such change, Franchisee must comply with the change, at Franchisee's expense.
12.3 Infringement.
(a) Defense of Franchisee. If Franchisee has used the Marks in accordance with this Agreement, then (i) CNS Franchising shall defend Franchisee (at CNS Franchising's expense) against any Action by a third party alleging infringement by Franchisee's use of a Mark, and (ii)
CNS Franchising will indemnify Franchisee for expenses and damages if the Action is resolved unfavorably to Franchisee.
- (b) Infringement by Third Party. Franchisee shall promptly notify CNS Franchising if Franchisee becomes aware of any possible infringement of a Mark by a third party. CNS Franchising may, in its sole discretion, commence or join any claim against the infringing party.
- (c) Control. CNS Franchising shall have the exclusive right to control any prosecution or defense of any Action related to possible infringement of or by the Marks.
Source: Item 22 — CONTRACTS (FDD pages 50–51)
What This Means (2024 FDD)
According to Crab N Spice's 2024 Franchise Disclosure Document, CNS Franchising has the authority to modify the marks that franchisees are required to use. The FDD specifies that CNS Franchising may add, modify, or discontinue any marks used under the Crab N Spice system. Franchisees are obligated to comply with these changes within a reasonable time frame, and at their own expense.
This provision means that a Crab N Spice franchisee must be prepared to update signage, marketing materials, and other branded items to reflect any changes to the marks dictated by CNS Franchising. The franchisee bears the financial responsibility for these updates. This is a fairly standard practice in franchising, as franchisors need the flexibility to update branding to stay current with market trends and protect their trademarks.
While Crab N Spice has the right to change the marks, the agreement also states that if a franchisee uses the marks in accordance with the agreement and faces an infringement claim, CNS Franchising will defend the franchisee and cover expenses and damages if the action is resolved unfavorably to the franchisee. This offers some protection to the franchisee, provided they adhere to the franchise agreement's guidelines for mark usage. The franchisee must promptly notify CNS Franchising if they become aware of any potential infringement of a mark by a third party, and CNS Franchising has the exclusive right to control any legal action related to the marks.