What expenses will Cream reimburse a franchisee for in a trademark infringement proceeding?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
We agree to reimburse you for all damages and expenses that you incur in any trademark infringement proceeding disputing your authorized use of the Marks under this Agreement if you have timely notified us of, and comply with our directions in responding to, the proceeding. At our option, we and our affiliates and may control the defense of any proceeding arising from your use of the Marks under this Agreement. If we choose to control the defense of any such proceeding, we may choose our own legal counsel and other similar representatives, and we will not be liable to you or any of your affiliates or representatives for any costs or expenses incurred on the basis of any additional or separate legal counsel or similar representatives you or they retain.
Source: Item 23 — RECEIPTS (FDD pages 61–192)
What This Means (2025 FDD)
According to the 2025 FDD, Cream will reimburse a franchisee for all damages and expenses incurred in a trademark infringement proceeding if the franchisee has notified Cream in a timely manner and complies with Cream's directions in responding to the proceeding. Cream has the option to control the defense of any proceeding arising from the franchisee's use of the Marks under the Franchise Agreement.
If Cream chooses to control the defense, it may select its own legal counsel and representatives. In this case, Cream will not be liable for any costs or expenses incurred by the franchisee or their affiliates or representatives if they retain additional or separate legal counsel.
This means that if a franchisee follows Cream's instructions and allows Cream to control the legal defense, Cream will cover the costs. However, if the franchisee decides to hire their own legal representation in addition to Cream's, Cream will not be responsible for those additional costs. This is a fairly standard arrangement in franchising, as it allows the franchisor to maintain control over brand-related legal matters while still providing support to franchisees.