What is a Cream franchisee's required action upon noticing any apparent infringement related to the Cream trademarks or system?
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, if a franchisee notices any potential infringement or challenges to the use of Cream's trademarks or system, they are required to immediately notify Cream. The franchisee is instructed not to communicate about the infringement with anyone other than Cream, its affiliates, their attorneys, and the franchisee's own attorneys. Cream's Franchise Agreement does not obligate them to take any specific action upon receiving such a notification. Cream retains the exclusive right to manage any legal proceedings related to infringement, challenges, or claims concerning the trademarks or the system, including choosing to take no action. Franchisees must also sign documents and take actions deemed necessary by Cream to protect their interests in the trademarks and the system. Cream is not obligated to defend the trademarks or system against valid claims of prior use or lawful concurrent use by others.
Cream will cover all damages and expenses the franchisee incurs while defending any trademark infringement proceeding disputing the franchisee's authorized use of the marks under the Franchise Agreement, provided the franchisee has promptly notified Cream, complied 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 can select its own legal counsel and will not be liable for any costs incurred by the franchisee for additional legal representation.
This means that as a Cream franchisee, you must be vigilant in protecting Cream's brand and trademarks. However, you have limited control over how infringement issues are handled, as Cream has the sole discretion to decide on the appropriate course of action. It is important to adhere to Cream's instructions and provide timely notification to ensure potential coverage of legal expenses in case of infringement disputes.