Who has the right to control the defense and settlement negotiations regarding an infringement claim against a Craters & Freighters franchisee?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
ty, so long as such claim arose solely out of Franchisee's authorized use of the Marks licensed under this Agreement in connection with the operation of the Franchised Business. Further, Franchisee acknowledges that Franchisor has the right to completely control the defense and, if appropriate, settlement negotiations and resolution regarding such claim, including the right to select legal counsel Franchisor deems appropriate.
Franchisee agrees to fully cooperate with Franchisor under such circumstances and to execute any and all documents and to complete such actions as may be necessary in the opinion of counsel for Franchisor to carry out such defense, settlement negotiations, or resolution of such claim.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to the 2025 Craters & Freighters Franchise Disclosure Document, Craters & Freighters retains the right to manage the defense, settlement negotiations, and resolution of any infringement claim. This includes the right for Craters & Freighters to select legal counsel they deem appropriate for the situation.
As a Craters & Freighters franchisee, you are obligated to fully cooperate with Craters & Freighters in these matters. This cooperation includes executing documents and completing actions deemed necessary by Craters & Freighters's counsel to facilitate the defense, settlement negotiations, or resolution of the claim.
It is important to note that Craters & Freighters's liability in such cases is limited to the amount of the initial franchise fee paid by the franchisee. This means that while Craters & Freighters controls the legal process, the franchisee may bear the brunt of any financial repercussions beyond the initial franchise fee.