Does the Desi District franchise agreement require them to take affirmative action when notified of copyright infringement?

According to the 2024 Desi District Franchise Disclosure Document, the franchise agreement does not require Desi District to take affirmative action when notified of trademark use or claims. However, the franchise agreement does obligate the franchisee to notify Desi District of any use of, or claims of rights to, a trademark that is identical or confusingly similar to a trademark licensed to the franchisee. Desi District retains the right to control any administrative proceedings or litigation involving a trademark licensed by them to the franchisee.

This means that while Desi District franchisees are required to inform Desi District of potential trademark infringements, Desi District is not obligated to take any specific action upon receiving such notification. However, Desi District maintains control over any legal proceedings related to the trademarks.

For a prospective franchisee, this implies that they must be vigilant in monitoring potential trademark infringements and promptly report them to Desi District. However, the franchisee cannot assume that Desi District will necessarily take action, as the decision to pursue any legal or administrative action rests solely with Desi District. It is important for franchisees to understand this dynamic and factor it into their business risk assessment.

This arrangement is not uncommon in franchising, where the franchisor typically retains control over trademarks and their enforcement. However, the lack of a requirement for affirmative action by Desi District could leave franchisees feeling vulnerable if they believe a trademark infringement is harming their business. Therefore, prospective franchisees should discuss with Desi District what actions the franchisor typically takes when notified of potential infringements.