Is a Hyper Kidz franchisee allowed to communicate with anyone other than Hyper Kidz and its counsel regarding an 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 the 2024 Hyper Kidz Franchise Disclosure Document, a franchisee is explicitly prohibited from communicating with any party other than Hyper Kidz and its legal counsel regarding any potential infringement, challenge, or claim related to the brand's Marks. This restriction ensures that Hyper Kidz maintains complete control over the handling of any legal matters pertaining to its trademarks.
This provision is designed to protect the integrity and value of the Hyper Kidz brand. By centralizing communication and decision-making authority with the franchisor, Hyper Kidz aims to ensure consistent and strategic responses to any threats to its intellectual property. This approach helps to avoid inconsistent or potentially damaging statements or actions by individual franchisees.
For a prospective Hyper Kidz franchisee, this means that if they become aware of any potential misuse or infringement of the Hyper Kidz Marks, their sole responsibility is to immediately notify Hyper Kidz. They must then refrain from discussing the matter with anyone else, including potential infringers, without the express consent of Hyper Kidz and its counsel. Failure to comply with this requirement could constitute a breach of the franchise agreement and potentially expose the franchisee to legal repercussions.
Hyper Kidz retains sole discretion to take any action it deems appropriate regarding infringements, including litigation or settlement. The franchisee is obligated to assist Hyper Kidz by executing documents and providing necessary assistance to protect the Marks. While Hyper Kidz will cover reasonable out-of-pocket expenses for the franchisee's compliance, the franchisee may need to share costs if any monetary recovery exceeds their initial expenses.