Is Itan required to take action if an Itan franchisee discovers an infringing use of 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, Itan is not required to take action if a franchisee discovers an infringing use of the Marks. However, the franchisee must notify Itan immediately if they discover an infringing use (or challenge to their use) of the Marks. Itan will then take the action it deems appropriate, but it is not obligated to take any action if it does not feel it is warranted. The franchisee cannot control any proceeding or litigation involving Itan's Marks.
This means that while Itan expects to be informed of any potential trademark infringements, the company retains full discretion over how to respond. A franchisee cannot force Itan to pursue legal action or take other measures to protect the Marks. This could be a disadvantage for franchisees who believe that a strong response is necessary to protect their business interests and the brand's reputation.
Furthermore, the Franchise Agreement does not require Itan to protect the franchisee's right to use the Marks, protect them against claims of infringement, or participate in their defense if they are involved in a legal proceeding related to the Marks. Itan also does not have to indemnify franchisees for expenses or damages incurred in such proceedings. This places the burden on the franchisee to bear the costs and risks associated with any legal challenges related to the use of Itan's Marks.
Given that Itan does not have a federal registration for all of its Marks, this could further increase the risk to franchisees. The FDD states that because the Marks are not federally registered, they do not have as many legal benefits and rights as a federally registered trademark. If Itan's right to use any of these Marks is challenged, the franchisee may have to change to an alternative trademark, which may increase their expenses. The FDD estimates these expenses could range from $10,000 to $20,000.