Does the Cream Franchise Agreement obligate Cream to take affirmative action when notified of trademark infringements or claims?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
You will be required to notify us immediately of any apparent infringement or challenge to your use of the Marks or the System, or of any person's claim of any rights in the Marks or the System, and not to communicate with any person other than us, our affiliates and our and their attorneys, and your attorneys, regarding any infringement, challenge, or claim. The Franchise Agreement does not require us to take affirmative action when notified of these uses or claims. We and our affiliates may take the action we deem appropriate (including no action) and control exclusively any litigation or other legal or administrative proceeding arising from any infringement, challenge, or claim or otherwise concerning the Marks or the System. You must sign any documents and take any other action that we deem necessary or advisable to protect and maintain our and our affiliates' (as applicable) interests in the Marks and the System. Neither we nor our affiliates will have any obligation to defend the Marks or the System from valid claims of prior use or of lawful concurrent use by others.
We will reimburse you for all damages and expenses that you incur in defending any trademark infringement proceeding disputing your authorized use of the Marks under the Franchise Agreement if you have timely notified us of, and comply with our directions in responding to, the proceeding, and are in compliance with your Franchise Agreement. We are not required to assume your defense. If we or our affiliates choose to control the defense of any such proceeding, such person may choose its own legal counsel and other similar representatives, and it 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 13 — TRADEMARKS (FDD pages 39–40)
What This Means (2025 FDD)
According to Cream's 2025 Franchise Disclosure Document, Cream franchisees are required to notify Cream immediately of any apparent trademark infringement or challenges to the use of Cream's marks or system. Franchisees must also report any claims of rights in the marks or system by another person. The franchisee is instructed not to communicate with anyone other than Cream, its affiliates, their attorneys, and the franchisee's own attorneys regarding any infringement, challenge, or claim.
However, the Franchise Agreement does not obligate Cream to take any specific affirmative action upon receiving such a notification. Cream and its affiliates retain the right to take whatever action they deem appropriate, including taking no action at all. Cream maintains exclusive control over any litigation or legal proceedings arising from infringement, challenges, claims, or other matters concerning the marks or the Cream system. Franchisees are required to sign documents and take actions deemed necessary by Cream to protect its interests in the marks and the system. Neither Cream nor its affiliates are obligated to defend the marks or system against valid claims of prior use or lawful concurrent use by others.
Cream will reimburse a franchisee for damages and expenses incurred in defending a trademark infringement proceeding if the franchisee has notified Cream in a timely manner, complies with Cream's directions in responding to the proceeding, and is in compliance with the Franchise Agreement. However, Cream is not required to assume the franchisee's defense. If Cream chooses to control the defense, it may select its own legal counsel and will not be liable for costs incurred by the franchisee for additional legal representation.