Does the Itan Franchise Agreement require Itan to protect an Itan franchisee's right to use the Marks?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
You must notify us immediately if you discover an infringing use (or challenge to your use) of the Marks. We will take the action we deem appropriate. We are not required to take any action if we do not feel it is warranted. You may not control any proceeding or litigation involving our Marks.
The Franchise Agreement does not require that we: (a) protect your right to use the Marks; (b) protect you against claims of infringement or unfair competition arising out of your use of the Marks; or (c) participate in your defense or indemnify you for expenses or damages you incur if you are a party to an administrative or judicial proceeding involving our Marks or if the proceeding is resolved in a manner unfavorable to you.
Source: Item 13 — TRADEMARKS (FDD pages 33–35)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, the Franchise Agreement does not require Itan to protect a franchisee's right to use the Marks. This means Itan is not obligated to take action against any third party infringing on the Marks, nor are they required to defend the franchisee against claims of infringement.
This lack of obligation extends to claims of infringement or unfair competition arising from the franchisee's use of the Marks. Itan is also not required to participate in the franchisee's defense or indemnify them for expenses or damages if the franchisee becomes involved in an administrative or judicial proceeding related to the Marks, especially if the outcome is unfavorable to the franchisee.
This is a significant risk for prospective Itan franchisees. If a trademark dispute arises, the franchisee may bear the full financial and legal burden of defending their right to use the Marks. This could involve substantial legal fees and potential damages, which could significantly impact the profitability of the franchise. It is important for potential franchisees to understand this risk and consider obtaining their own legal counsel to assess the potential implications.
While Itan does not guarantee protection of the Marks, the FDD states that franchisees must notify Itan immediately if they discover any infringing use or challenges to the Marks. Itan will then take whatever action they deem appropriate, but they are not required to take any action at all. This leaves the franchisee in a vulnerable position, as they are dependent on Itan's willingness to act, without any contractual guarantee that Itan will do so.