What action must a Hyper Kidz franchisee take if they notice an apparent infringement of a Mark?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
You shall immediately notify us of any apparent infringement of or challenge to your use of any Mark or claim by any person of any rights in any Mark, and you shall not communicate with any person other than us and our counsel in connection with any such infringement, challenge or claim. We shall have sole discretion to take such action as we deem appropriate in connection with the foregoing and the right to control exclusively any settlement, litigation or Patent and Trademark Office or other proceeding arising out of any such alleged infringement, challenge or claim or otherwise relating to any Mark. You agree to execute any and all instruments and documents, render such assistance, and do such acts and things as, in the opinion of our counsel, are necessary or advisable to protect and maintain our interests in any litigation or other proceeding or to otherwise protect and maintain our interests in the Marks. We will reimburse you for the reasonable out-of-pocket expenses incurred and paid by you in complying with the requirements imposed by this Section, provided however, if any action taken by us results in any monetary recovery for you which exceeds your costs, then you must pay your own costs and share pro-rata in our costs thereof, up to the amount of the monetary recovery.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, if a franchisee observes an apparent infringement of a Mark, they are required to immediately notify Hyper Kidz. The franchisee is prohibited from communicating with any other person besides Hyper Kidz and their counsel regarding the infringement.
Hyper Kidz retains sole discretion to take any action they deem appropriate regarding the infringement, including controlling any settlement, litigation, or proceedings with the Patent and Trademark Office. The franchisee must execute any documents, provide assistance, and perform any actions that Hyper Kidz's counsel deems necessary to protect and maintain Hyper Kidz's interests in any litigation or proceeding related to the Mark.
Hyper Kidz will reimburse the franchisee for reasonable out-of-pocket expenses incurred while complying with these requirements. However, if any action taken by Hyper Kidz results in a monetary recovery for the franchisee that exceeds their costs, the franchisee must cover their own costs and share proportionally in Hyper Kidz's costs, up to the amount of the monetary recovery. This ensures that Hyper Kidz maintains control over its brand and legal strategy while also protecting the franchisee from direct costs associated with assisting in these matters.