What is the Exit franchisee's obligation regarding notifying the Subfranchisor of claims related to the Proprietary Marks?
Exit Franchise · 2025 FDDAnswer from 2025 FDD Document
8.4. Adverse Claims to Proprietary Marks; Infringements
- (A) Franchisee shall promptly notify Subfranchisor of any claim, demand, or suit based upon or arising out of any attempt by any other person, firm, or corporation to use the Proprietary Marks, or any colorable variation of the Proprietary Marks. Franchisee agrees also to promptly notify Subfranchisor of any litigation instituted by any person, firm corporation, or governmental agency against EXIT, Subfranchisor, or any franchisee, involving the Proprietary Marks.
- (B) Franchisee shall promptly report all likely infringements of the Proprietary Marks to Subfranchisor and shall assist Subfranchisor or EXIT in resolving conflicts, without reimbursement or remuneration. Subfranchisor will investigate likely infringements and will undertake such efforts to protect the Proprietary Marks as it deems reasonable and appropriate. Subfranchisor, at its sole option, may undertake the prosecution of any such infringements and shall bear all costs of any such prosecution, except as otherwise provided in this Agreement.
- (C) If Subfranchisor or EXIT undertakes the defense or prosecution of any litigation relating to the Proprietary Marks, Franchisee agrees, without reimbursement or remuneration, to execute any and all documents and to do such acts and things as, in the opinion of legal counsel for Subfranchisor or EXIT, may be reasonably necessary for Franchisee to assist in such defense or prosecution.
(D) Franchisee shall make every effort to protect, maintain and advance the trade name, service mark, and the System, and shall report imitations and infringements upon them.
Source: Item 23 — RECEIPT (FDD pages 42–235)
What This Means (2025 FDD)
According to Exit's 2025 Franchise Disclosure Document, the franchisee has specific obligations regarding the Proprietary Marks. The Exit franchisee must promptly notify the Subfranchisor of any claim, demand, or suit arising from another party's attempt to use the Proprietary Marks or any similar variation. This includes notifying the Subfranchisor of any litigation against Exit, the Subfranchisor, or any franchisee involving the Proprietary Marks.
Furthermore, the Exit franchisee is required to report any likely infringements of the Proprietary Marks to the Subfranchisor. The franchisee must also assist Exit or the Subfranchisor in resolving conflicts related to these infringements, without expecting reimbursement or remuneration for their assistance. The Subfranchisor will then investigate these infringements and take action to protect the Proprietary Marks as deemed reasonable.
In addition to reporting and assisting, the Exit franchisee is obligated to make every effort to protect, maintain, and advance the trade name, service mark, and the Exit System. This includes reporting any imitations and infringements upon them. The franchisee must also execute any documents and perform any actions that legal counsel for the Subfranchisor or Exit deems reasonably necessary to assist in the defense or prosecution of litigation relating to the Proprietary Marks, again without reimbursement or remuneration.