Will Crave Cookies indemnify a franchisee for expenses or damages in a copyright infringement proceeding?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
ARTICLE 12. MARKS
- 12.1 Authorized Marks. Franchisee shall use no trademarks, service marks or logos in connection with the Business other than the Marks. Franchisee shall use all Marks specified by Crave Cookies Franchising, and only in the manner as Crave Cookies Franchising may require. Franchisee has no rights in the Marks other than the right to use them in the operation of the Business in compliance with this Agreement. All use of the Marks by Franchisee and any goodwill associated with the Marks, including any goodwill arising due to Franchisee's operation of the Business, will inure to the exclusive benefit of Crave Cookies Franchising.
- 12.2 Change of Marks. Crave Cookies Franchising may add, modify, or discontinue any Marks to be used under the System. Within a reasonable time after Crave Cookies 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) Crave Cookies Franchising shall defend Franchisee (at Crave Cookies Franchising's expense) against any Action by a third-party alleging infringement by Franchisee's use of a Mark, and (ii) Crave Cookies 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 Crave Cookies Franchising if Franchisee becomes aware of any possible infringement of a Mark by a third party. Crave Cookies Franchising may, in its sole discretion, commence or join any claim against the infringing party.
- (c) Control. Crave Cookies Franchising shall have the exclusive right to control any prosecution or defense of any Action related to possible infringement of or by the Marks.
- 12.4 Name. If Franchisee is an entity, it shall not use the word[s] "Crave Cookies" or any confusingly similar words in its legal name.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 32–33)
What This Means (2025 FDD)
According to Crave Cookies' 2025 Franchise Disclosure Document, Crave Cookies will defend and indemnify a franchisee against third-party claims of trademark infringement under specific conditions. If the franchisee has used the Marks in accordance with the franchise agreement, Crave Cookies will defend the franchisee (at Crave Cookies' expense) against any action alleging infringement due to the franchisee's use of a Mark. Furthermore, Crave Cookies will indemnify the franchisee for expenses and damages if the action is resolved unfavorably to the franchisee. This protection applies only if the franchisee adheres to the agreement's terms regarding the use of Crave Cookies' trademarks and service marks.
However, the franchisee must promptly notify Crave Cookies if they become aware of any potential trademark infringement by a third party. Crave Cookies retains the exclusive right to control any prosecution or defense related to possible infringement of the Marks. This means that while Crave Cookies provides defense and indemnity, they also maintain control over the legal strategy and decisions related to any infringement claims.
This arrangement is fairly typical in franchising, as franchisors need to protect their brand's intellectual property. By maintaining control over infringement matters, Crave Cookies can ensure consistent brand protection and legal strategies across all franchise locations. Franchisees benefit from this arrangement by receiving legal support and financial protection in case of infringement claims, provided they adhere to the franchisor's guidelines for using the trademarks.