What are the expectations for Floors To Go franchisees regarding litigation?
Floors_To_Go Franchise · 2025 FDDAnswer from 2025 FDD Document
the validity of all registrations thereof and shall not at any time do or permit to be done any act or thing which will in any way impair our rights.
- b. You shall not in any way challenge or contest the validity of the Marks or any of our rights under this Agreement, nor shall you willingly become an adverse party to litigation in which others shall so contest the Marks or our rights. In addition, you shall not in any way seek to avoid or reduce your obligations hereunder because of the assertion or allegation by any person(s) that the Marks or any of them are invalid or by reason of any contest or claim concerning our rights. You further agree not to contest that your rights under this Agreement are solely those of a franchisee and that such rights end upon the termination or expiration of the Agreement as provided herein.
- c. Any permutation of the Marks adopted and used by you shall be and become our property and shall be included as Marks subject to this Agreement. You agree that your every use of the Marks shall inure to our benefit, and that you shall not at any time acquire any rights in such Marks beyond the license herein provided by virtue of any use you may make of such Marks.
- d. You acknowledge that only we may file and prosecute applications for registration of the Marks in any country or jurisdiction and agree that we may, from time to time, pursue such registrations we may deem advisable. You shall cooperate with us in connection with any such filings, but the expenses of preparing and prosecuting such applications shall be borne solely by us.
- 4.11. Right to Enjoin Improper Use of Marks and Names. We shall protect and maintain all rights to the name and mark "Floors To Go" and all related names, marks, or logos against encroachment, misuse, or unauthorized use and against challenges to any rights of your use, as we shall determine in our sole discretion.
Source: Item 23 — RECEIPTS (FDD pages 47–204)
What This Means (2025 FDD)
According to the 2025 Floors To Go Franchise Disclosure Document, franchisees have specific obligations regarding litigation, particularly concerning the brand's trademarks. Floors To Go franchisees must acknowledge the company's ownership and rights to its trademarks and agree not to take any actions that could harm those rights.
Specifically, franchisees cannot challenge the validity of the Floors To Go trademarks or become an adverse party in litigation against Floors To Go concerning those marks. They also cannot avoid their obligations under the franchise agreement based on claims that the trademarks are invalid. This protects Floors To Go's brand identity and market position.
Furthermore, the FDD states that the prevailing party in any litigation, arbitration, or dispute resolution will be entitled to recover all reasonable costs and expenses, including attorney's fees, from the other party. This applies to costs incurred before and during the proceedings, including appeals, enforcement, collection, or bankruptcy actions. This clause could significantly impact a franchisee's financial obligations in case of a legal dispute with Floors To Go.
Floors To Go also has the right to protect and maintain its trademarks against unauthorized use or challenges, as determined in its sole discretion. Franchisees are expected to cooperate with Floors To Go in registering and protecting these trademarks, although the company bears the expenses for these activities. This comprehensive approach to trademark protection underscores the importance of brand integrity within the Floors To Go franchise system.