Under what condition will Cream reimburse a franchisee for expenses incurred defending a trademark infringement proceeding related to the Cream trademarks?
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 reimburse a franchisee for damages and expenses incurred while defending a trademark infringement proceeding if the franchisee meets certain conditions. Specifically, Cream requires that the franchisee's use of the trademarks is authorized under the Franchise Agreement.
To qualify for reimbursement, the franchisee must also promptly notify Cream of the infringement proceeding and comply with Cream's directions for responding to it. Furthermore, the franchisee must be in compliance with all terms of their Franchise Agreement.
However, Cream is not obligated to assume the franchisee's defense in such a proceeding. If Cream chooses to control the defense, 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 separate legal representation.