Is ADQ obligated to protect a Dq Treat franchisee's right to use the trademarks?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
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 13 — UItem 13U***:** U**Trademarks (FDD pages 49–50)
What This Means (2025 FDD)
According to Dq Treat's 2025 Franchise Disclosure Document, ADQ (American Dairy Queen) is not obligated to protect a franchisee's right to use the trademarks. This means that Dq Treat franchisees bear the risk of potential infringement or unfair competition claims arising from their use of the Dq Treat trademarks. ADQ also does not have an obligation to participate in a franchisee's defense or indemnify them in such cases. However, Dq Treat retains the right to control any litigation related to the trademarks and decide whether to pursue or settle any infringement actions.
As a Dq Treat franchisee, you are required to promptly notify ADQ of any infringement or unauthorized use of the trademarks that you become aware of and cooperate with any action that ADQ undertakes. However, ADQ is not required by the franchise agreement to take any action even after being notified. Furthermore, if ADQ determines that a third party's claim to trademark rights is superior and requires changes or substitutions to the trademarks, you must immediately make those changes at your own expense.
This arrangement places the responsibility and cost of trademark-related issues primarily on the franchisee. While ADQ retains control over trademark litigation and decisions, franchisees are obligated to comply with any required changes or discontinuations of trademark use without any guaranteed protection or compensation. This is a significant risk factor to consider before investing in a Dq Treat franchise. It is common in franchising for the franchisor to take the lead in protecting trademarks, but the FDD clearly states that ADQ is not obligated to do so.