Is ADQ obligated to participate in the defense of Dq Treat franchisees against infringement claims?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
y affect your use of the principal trademarks in the state where your franchised business will be located.
ADQ is not obligated to protect your right to use the Trademarks, or to protect you against infringement or unfair competition claims arising out of your use of the Trademarks, or to participate in your defense or indemnify you. ADQ has the right to control any litigation related to the Trademarks and the right to decide to pursue or settle any infringement actions related to the Trademarks. You must notify ADQ promptly of any infringement or unauthorized use of the Trademarks of which you become aware and cooperate with any action that ADQ undertakes; however, ADQ is not required by the franchise agreement to take affirmative action when notified of such uses. If ADQ determines that a claim by a party that its rights to use the Trademarks are superior and requires changes or substitutions to the Trademarks, you must immediately make the changes or substitutions required by ADQ at your expense. You do not have any rights under the franchise agreement if ADQ requires you to modify or discontinue using a trademark.
Source: Item 14 — U***:** U**Patents, Copyrights, and Proprietary Information (FDD pages 50–51)
What This Means (2025 FDD)
According to the 2025 Dq Treat FDD, ADQ (American Dairy Queen Corporation) generally is not obligated to defend Dq Treat franchisees against infringement claims. Item 13 states that ADQ is not required to protect a franchisee's right to use the trademarks, defend against infringement claims, or participate in a franchisee's defense. However, ADQ retains the right to control any litigation related to the trademarks and to decide whether to pursue or settle infringement actions.
Despite the general disclaimer of obligation, there is an addendum to Item 17 that states ADQ will undertake the defense of infringement claims by third parties involving the Dairy Queen® Trademark. In such cases, the franchisee must cooperate with the defense in a reasonable manner, with ADQ bearing the direct costs of cooperation.
This means that while Dq Treat franchisees are typically responsible for their own defense in trademark disputes, ADQ will step in to defend the Dairy Queen® Trademark itself. Franchisees should be aware of their responsibility to notify ADQ of any potential infringement and to cooperate with ADQ's defense efforts if required. It is important to note the distinction between ADQ defending the trademark versus defending the franchisee directly; the franchisee's cooperation is required, but their legal costs may not be covered beyond what ADQ deems 'direct costs of such cooperation'.