Does Pearce Bespoke reserve the right to control any trademark litigation?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
Pearce Bespoke is not required to protect you against infringement or unfair competition claims arising out of your use of the Marks, or to participate in your defense or indemnify you. Pearce Bespoke reserves the right to control any trademark litigation and will take the action Pearce Bespoke believes appropriate if a third party infringes Pearce Bespoke's Marks. You must notify Pearce Bespoke promptly if you become aware of any infringement or unauthorized use of the Marks and cooperate with any action that Pearce Bespoke takes. Pearce Bespoke will pay the cost and expense of all litigation Pearce Bespoke incurs, including attorneys' fees, specifically related to the Marks. However, Pearce Bespoke is not required to take affirmative action when notified of these uses or claims. If any party claims that its rights to use any of the Marks are superior and Pearce Bespoke confirms that claim, you must, at your expense, immediately make the changes and use the substitutions to the Marks as Pearce Bespoke requires.
Source: Item 13 — TRADEMARKS (FDD page 29)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, Pearce Bespoke retains the right to control any trademark litigation pertaining to its marks. This means that if a third party infringes on Pearce Bespoke's trademarks, Pearce Bespoke has the authority to take legal action as it deems appropriate. The franchisee is obligated to promptly inform Pearce Bespoke of any infringement or unauthorized use of the marks and must cooperate with any actions taken by Pearce Bespoke.
Pearce Bespoke will cover the costs and expenses associated with any litigation it initiates related to its trademarks, including attorney's fees. However, Pearce Bespoke is not obligated to take any action upon being notified of such infringements or claims. This clause also stipulates that if a third party asserts superior rights to the trademarks, and Pearce Bespoke confirms the validity of that claim, the franchisee must immediately make any necessary changes or substitutions to the marks at their own expense.
This arrangement is fairly typical in franchising, as franchisors need to protect their brand identity and trademarks. However, it's important for a prospective Pearce Bespoke franchisee to understand that while Pearce Bespoke will handle and pay for litigation it initiates, it is not required to take any action at all. Furthermore, the franchisee bears the cost of changing the marks if Pearce Bespoke determines another party has superior rights. This could potentially involve expenses for new signage, marketing materials, and other branded items.
Therefore, a prospective franchisee should consider the potential financial implications of trademark-related issues and clarify with Pearce Bespoke under what circumstances they would pursue litigation and what support they would provide to franchisees in the event of a trademark dispute or claim of superior rights.