Under what condition might the Floyds 99 franchisee be joined as a party to an infringement action?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, a franchisee may be joined as a party to an infringement action under specific circumstances related to the protection of the brand's trademarks, licensed methods, and copyrighted works. The franchisor retains the right to determine whether legal action is necessary in cases of potential infringement or illegal use of trademarks similar to the Floyds 99 marks or copyrighted material.
Floyds 99 may commence legal action in its own name or the name of Floyd's 99 Holdings, LLC. The franchisor can include the franchisee in the legal action if it deems it reasonably necessary to maintain the protection and quality control of its marks, licensed methods, and copyrighted works. This implies that if the infringement is closely tied to the franchisee's operations or if their involvement is crucial for the legal strategy, they could be required to participate in the lawsuit.
Floyds 99 will bear the reasonable costs of any such legal action, including attorney's fees. Furthermore, the franchisee is obligated to fully cooperate with the franchisor in any litigation. The franchisor will indemnify and hold the franchisee harmless from any losses, liabilities, claims, or damages, including legal costs, arising from the franchisee's authorized use of the Floyds 99 marks or copyrighted works, provided that the franchisee complies with the terms of the franchise agreement. This protection is contingent on the franchisee promptly notifying the franchisor of any claims for which they seek indemnification, and the franchisor has the option to control the defense of any action involving such claims.
This clause protects the franchisee from financial burden due to authorized use of Floyds 99's intellectual property, but it also underscores the importance of adhering to the franchise agreement and operational standards to avoid potential legal entanglements. Franchisees should ensure they understand and comply with all guidelines regarding the use of trademarks and copyrighted materials to minimize the risk of being involved in an infringement action.