What are the franchisee's obligations regarding responding to a trademark infringement proceeding to be eligible for reimbursement from Extreme Art Studio?
Extreme_Art_Studio Franchise · 2024 FDDAnswer from 2024 FDD Document
We agree to reimburse you for all damages and expenses that you incur in any trademark infringement proceeding disputing your authorized use of any Mark under this Franchise Agreement if you have timely notified us of, and comply with our directions in responding to, the proceeding.
At our option, we and/or the Trademark Owner may defend and control the defense of any proceeding arising from your use of any Mark under this Franchise Agreement.
Source: Item 22 — CONTRACTS (FDD page 49)
What This Means (2024 FDD)
According to Extreme Art Studio's 2024 Franchise Disclosure Document, if a franchisee faces a trademark infringement proceeding due to their authorized use of a mark, Extreme Art Studio will reimburse the franchisee for damages and expenses incurred. However, this reimbursement is contingent upon the franchisee fulfilling specific obligations.
To be eligible for reimbursement, the franchisee must promptly notify Extreme Art Studio about the trademark infringement proceeding. Furthermore, the franchisee must comply with Extreme Art Studio's directions on how to respond to the proceeding. This implies that Extreme Art Studio has the right to direct the franchisee's actions and strategy in dealing with the infringement claim.
Extreme Art Studio also retains the option, along with the Trademark Owner, to take over and control the defense of any proceeding arising from the franchisee's use of a Mark. This clause highlights the importance of adhering to Extreme Art Studio's instructions, as they may choose to manage the legal process directly. Franchisees should be aware that failure to notify Extreme Art Studio or comply with their directions could result in the loss of reimbursement for expenses and damages related to the trademark infringement proceeding.