How does the litigation involving Floyds 99 Franchising, LLC (Item 3) affect the franchisee's obligations regarding the use of trademarks (Item 9)?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 3: LITIGATION]
ITEM 3. LITIGATION
Matthew Chavez and Nicole Deis v. Roise Barbers, Inc., Jonathan M. Roise, Floyd's 99 Holdings, LLC and Floyd's 99 Franchising, LLC, No. 37-2020-00040793-CU-OE-CTL (Superior Court of the State of California for the County of San Diego, filed November 6, 2020). On March 27, 2023, Plaintiffs filed a Second Amended Class Action Complaint to add Floyd's 99 Holdings, LLC and Floyd's 99 Franchising, LLC as defendants to the lawsuit previously filed against Roise Barbers, Inc., a FLOYD'S 99 franchisee,
and Jonathan Roise. Plaintiffs are former employees of Roise Barbers, Inc., and sought damages, relief and restitution under California law for alleged employment and labor violations. Plaintiffs alleged that Floyd's 99 Franchising, LLC was liable as a joint employer or co-employer with Roise Barbers, Inc. On June 14, 2023, Floyd's 99 Holdings, LLC was removed from the litigation when it was dismissed without prejudice. On September 6, 2024, Floyd's 99 Franchising, LLC paid $2,500 as part of a larger settlement with Defendants in order to avoid additional attorneys' fees and all parties entered into a Settlement and Release Agreement. On December 12, 2024, the court dismissed the lawsuit without prejudice.
Other than the above action, no litigation is required to be disclosed in this Item.
[Item 22: CONTRACTS]
- 15.4 Mark Infringement.
The Franchisee shall notify the Franchisor in writing of any possible infringement or illegal use by others of a trademark the same as or confusingly similar to the Marks or of any copyrighted work of the Franchisor which may come to its attention.
The Franchisee acknowledges that the Franchisor shall have the right, in its sole discretion, to determine whether any action will be taken on account of any possible infringement or illegal use.
The Franchisor may commence or prosecute such action in the Franchisor's own name, the name of Floyd's 99 Holdings, LLC and may join the Franchisee as a party to the action if the Franchisor determines it to be reasonably necessary for the continued protection and quality control of the Marks, Licensed Methods and copyrighted works.
The Franchisor shall bear the reasonable cost of any such action, including attorneys' fees.
The Franchisee must fully cooperate with the Franchisor in any such litigation.
The Franchisor shall indemnify and hold the Franchisee harmless from, and reimburse the Franchisee for, any loss, liability, claim or damages (collectively, the "Claims"), and all reasonable costs, expenses and attorneys' fees incurred defending any Claims brought against the Franchisee, or in any action in which the Franchisee is named as a party, which arises out of or is related to the Franchisee's authorized use of any Mark or copyrighted work of the Franchisor, which use is in compliance with the terms of this Agreement.
The Franchisee shall timely notify the Franchisor of any Claims for which it is seeking indemnity hereunder.
The Franchisor, at its option, shall be entitled to control the defense of any action or proceeding involving any Claims.
- 15.5 Franchisee's Business Name and Domain Name.
The Franchisee acknowledges that the Franchisor and affiliates of the Franchisor have a prior and superior claim to the "FLOYD'S 99" trade name.
The Franchisee shall not use the words "FLOYD'S 99" in the legal name of its corporation, limited liability company or any other business entity used in conducting the business provided for in this Agreement.
The Franchisee also agrees not to register or attempt to register an Internet domain name or a trade name with a state using the words "FLOYD'S 99" unless such registration meets the Franchisor's specifications and the Franchisee obtains the Franchisor's prior written consent.
When this Agreement expires or terminates, the Franchisee shall execute any assignment or other document the Franchisor requires to transfer to the Franchisor any rights the Franchisee may possess in a trade name or an Internet domain name utilizing the words "FLOYD'S 99" or any other Mark owned by the Franchisor.
The Franchisee shall not identify itself as being "Floyd's 99 Franchising, LLC" or as being associated with the Franchisor in any manner other than as a franchisee or licensee or as being associated with any affiliate of the Franchisor.
The Franchisee shall, in all advertising and promotion and promotional materials, display its business name only in obvious conjunction with the phrase "FLOYD'S 99 Licensee" or "FLOYD'S 99 Franchisee" or with such other words and in such other phrases to identify itself as an independent owner of the FLOYD'S 99 Shop, as may from time to time be prescribed in the Operations Manual.
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the prior litigation involving Floyds 99 Franchising, LLC does not alter a franchisee's obligations regarding trademark use. The FDD outlines specific responsibilities and protections for franchisees concerning the use of Floyds 99's trademarks.
As a Floyds 99 franchisee, you are obligated to notify Floyds 99 in writing of any potential trademark infringements or illegal use of marks similar to Floyds 99's. Floyds 99 has the sole discretion to decide whether to take action on such infringements and may include the franchisee in any legal action if deemed necessary to protect the trademarks. Floyds 99 will cover the reasonable costs of these actions, including attorney's fees. The franchisee is required to fully cooperate with Floyds 99 in any litigation.
Floyds 99 will indemnify and protect the franchisee from any claims or damages resulting from the franchisee's authorized use of Floyds 99's trademarks, provided the use complies with the franchise agreement. The franchisee must promptly inform Floyds 99 of any claims for which they seek indemnification, and Floyds 99 has the option to control the defense of any related legal proceedings. Furthermore, franchisees cannot use "FLOYD'S 99" in their legal business name or register domain names with "FLOYD'S 99" without prior written consent from Floyds 99. Franchisees must also clearly identify themselves as a "FLOYD'S 99 Licensee" or "FLOYD'S 99 Franchisee" in all advertising materials.
The resolution of the lawsuit described in Item 3, where Floyd's 99 Franchising, LLC paid $2,500 as part of a settlement, does not change these obligations. The franchisee's responsibilities regarding trademark usage, notification of infringement, and cooperation in legal matters remain in effect as outlined in the franchise agreement. The litigation history provides context but does not diminish the importance of adhering to trademark guidelines to protect the brand and avoid potential legal issues.