If Cream chooses to control the defense of a trademark infringement proceeding, is Cream liable for costs incurred by the franchisee's separate legal counsel?
Cream Franchise · 2025 FDDAnswer from 2025 FDD Document
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 will not be liable for the costs or expenses of a franchisee's separate legal counsel if Cream chooses to control the defense of a trademark infringement proceeding.
Specifically, if a franchisee is involved in a trademark infringement proceeding related to their authorized use of Cream's marks, the franchisee must promptly notify Cream and follow Cream's directions in responding to the proceeding, while also remaining in compliance with the Franchise Agreement. If the franchisee meets these conditions, Cream will reimburse the franchisee for all damages and expenses incurred in defending the infringement proceeding.
However, Cream is not obligated to assume the franchisee's defense. If Cream chooses to control the defense, the franchisee may choose their own legal counsel, but Cream will not be responsible for any costs or expenses associated with the franchisee's separate legal representation. This means that while Cream covers the costs of the defense it controls, the franchisee bears the financial responsibility for any additional legal counsel they decide to retain.