Under the Franchise Agreement, what actions does Gold Star agree to take to protect the Marks?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
You must notify Gold Star promptly of any claim, demand or legal action by any third party involving the Marks or any potentially infringing use of the Marks, or any mark, name, logo or symbol identical to or confusingly similar to any of the Marks. Under the Franchise Agreement, Gold Star agrees to take whatever actions it deems reasonably necessary to protect the Marks and the goodwill associated therewith. Gold Star retains the exclusive right, in its sole discretion exercised in good faith, to determine and undertake the actions, if any, that it deems appropriate to prevent the infringement of the Marks or the diminution of the goodwill in the Marks. If a third party brings a legal action against you challenging your right to use the Marks as authorized by the Franchise Agreement, Gold Star may, in its sole discretion, assume your defense utilizing counsel of Gold Star's choice and must indemnify you against all damages for infringement for which you are held liable in that action arising out of your authorized use of the Marks pursuant to and in compliance with the Franchise Agreement, if the following conditions are satisfied: (a) you provide Gold Star with timely notice of the institution of the action, (b) you cooperate fully with Gold Star's counsel in defending against the action and (c) Gold Star retains ultimate control over the strategy involved in defending against and/or resolving the action. If Gold Star undertakes the defense or prosecution of any litigation pertaining to the right to use the Marks, you must execute all documents and do all acts and things as may be necessary, in the opinion of counsel for Gold Star, to carry out the defense or prosecution, whether the action is in the name of Gold Star, or in your name. Gold Star is not responsible for the cost of any independent legal counsel retained by you in any litigation. Except as set forth above, Gold Star will not be liable to you for any damages, costs, expenses, loss of profits or business opportunities, or incidental or consequential damages of any kind regarding or under any action or other matter involving the Marks. If you fail to meet any of your obligations described in this paragraph, Gold Star's obligations and warranties are void regarding the event at issue and Gold Star has no liability for costs incurred by or damages awarded against you.
Source: Item 13 — Trademarks (FDD pages 37–40)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, Gold Star agrees to take actions it deems reasonably necessary to protect its Marks and the associated goodwill. If a third party initiates legal action against a franchisee challenging their right to use the Marks, Gold Star may assume the defense, utilizing counsel of their choice. If Gold Star assumes the defense, they must indemnify the franchisee against all damages for infringement that the franchisee is held liable for in that action, provided the franchisee's use of the Marks was authorized and in compliance with the Franchise Agreement.
However, this obligation is contingent upon the franchisee providing timely notice of the action, fully cooperating with Gold Star's counsel, and allowing Gold Star to retain ultimate control over the defense strategy. The franchisee must also execute all documents and perform all acts deemed necessary by Gold Star's counsel for the defense or prosecution of any litigation pertaining to the Marks, whether the action is in Gold Star's name or the franchisee's name. Gold Star is not responsible for the cost of any independent legal counsel retained by the franchisee.
Gold Star will not be liable to the franchisee for any damages, costs, expenses, loss of profits or business opportunities, or incidental or consequential damages of any kind regarding any action involving the Marks, except as explicitly stated above. If the franchisee fails to meet their obligations, Gold Star's obligations and warranties are void, and Gold Star has no liability for costs incurred by or damages awarded against the franchisee.