Is Cream required to assume a franchisee's defense in a trademark infringement proceeding?
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 is not required to assume a franchisee's defense in a trademark infringement proceeding. However, Cream will reimburse a franchisee for all damages and expenses incurred while defending a trademark infringement proceeding if the dispute concerns the franchisee's authorized use of Cream's marks under the Franchise Agreement. To be eligible for reimbursement, the franchisee must notify Cream of the proceeding in a timely manner, comply with Cream's directions for responding to the proceeding, and be in compliance with the Franchise Agreement.
If Cream chooses to control the defense of a trademark infringement proceeding, it has the right to select its own legal counsel. In this case, Cream will not be liable for any costs or expenses incurred by the franchisee if they choose to retain additional or separate legal counsel.
It is important for prospective Cream franchisees to understand these conditions regarding trademark infringement proceedings. While Cream is not obligated to assume a franchisee's defense, the reimbursement provision offers some financial protection, provided the franchisee adheres to Cream's notification and compliance requirements. Franchisees should carefully review the Franchise Agreement and consult with legal counsel to fully understand their rights and obligations in the event of a trademark dispute.