Who has the right to defend or settle a Trademark Claim against an Hck Hot Chicken franchisee?
Hck_Hot_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
rate fully with Franchisor in connection with the defense of any such claim. Franchisee may participate at its own expense in such defense or settlement, but Franchisor's decisions with regard thereto shall be final.
- 11.6 Prosecution of Infringers. If Franchisee shall receive notice or is informed or learns that any third party, which it believes to be unauthorized to use the Franchisor's trade dress or Marks, is using Franchisor's trade dress or Marks or any variant thereof, Franchisee shall promptly notify Franchisor of the facts relating to such alleged infringing use. Thereupon, Franchisor shall, in its discretion, determine whether or not it wishes to take any action against such third person on account of such alleged infringement of the trade dress and/or Marks. Franchisee shall have no right to make any demand against any such alleged infringer or to prosecute any claim of any kind or nature whatsoever against such alleged infringer for or on account of such infringement.
- 11.7 Modification of Marks. From time to time, in the HCK Hot Chicken Brand Standards Manual or in directives or bulletins supplemental thereto, Franchisor may add to, delete or modify any or all of the Marks and trade dress. Franchisee shall, at its cost and expense, use, or cease using, as may be applicable, the Marks and/or trade dress, including any such modified or additional trade names, trademarks, service marks, logotypes and commercial symbols, in strict accordance with the procedures, policies, rules and regulations contained in the HCK Hot Chicken Brand Standards Manual or in written directives issued by Franchisor to Franchisee, as though they were specifically set forth in this Agreement.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 54)
What This Means (2025 FDD)
According to Hck Hot Chicken's 2025 Franchise Disclosure Document, Hck Hot Chicken retains the right to defend or settle trademark claims against its franchisees. While the franchisee may participate in the defense or settlement at their own expense, Hck Hot Chicken's decisions are final. This means that Hck Hot Chicken has ultimate control over how these claims are handled.
This arrangement is typical in franchising, as the franchisor has a vested interest in protecting its brand and trademarks. By retaining control over trademark defense and settlement, Hck Hot Chicken can ensure consistent legal strategies and protect the overall brand reputation. Franchisees must promptly notify Hck Hot Chicken of any potential infringement of the brand's trade dress or marks by third parties, but the franchisee cannot take any action against the alleged infringer themselves.
However, Hck Hot Chicken will indemnify the franchisee and their owners from costs and expenses from claims based upon the violation of a third party's intellectual property rights caused by the franchisee's use of the marks in compliance with the franchise agreement and Brand Standards Manual. The franchisee must promptly notify Hck Hot Chicken of any such claim and fully cooperate with Hck Hot Chicken in the defense of the claim. This indemnification provides a level of protection for franchisees operating within the guidelines set by Hck Hot Chicken.
This section of the FDD highlights the importance of franchisees adhering to Hck Hot Chicken's brand standards and trademark usage guidelines. Franchisees should ensure they are using the trademarks correctly and following the brand standards manual to minimize the risk of intellectual property claims. Understanding these rights and obligations is crucial for prospective franchisees to assess the potential risks and responsibilities associated with operating an Hck Hot Chicken franchise.