Is Southern Steer required to take affirmative action when notified of infringement?
Southern_Steer Franchise · 2025 FDDAnswer from 2025 FDD Document
You must notify Us immediately if You learn about an infringer or of a challenge to Your use of the Mark(s). We are not required to take affirmative action when notified of such infringement and We are not contractually obligated by the Franchise Agreement to protect You against claims of infringement or unfair competition involving the Mark(s), but it is Our policy to do so, when, in the opinion of Our counsel, Your rights require protection. We will pay costs, including attorneys' fees and court costs, associated with any litigation that We elect to bring or defend to protect Your use of the licensed Mark(s). We do not indemnify You for expenses or damages incurred by You. You are obligated to fully cooperate with Us in any litigation We bring or defend for Your benefit. We will control any administrative proceeding or litigation involving the Mark(s). However, if anyone establishes to Our satisfaction that its rights are, for any legal reason, superior to the rights of Southern Steer Butcher, LLC as to the Mark(s), then You must use the variances or other service marks, trademarks or trade names We require.
Source: Item 13 — ITEM. 13 TRADEMARKS (FDD pages 38–39)
What This Means (2025 FDD)
According to Southern Steer's 2025 Franchise Disclosure Document, Southern Steer is not required to take affirmative action if a franchisee notifies them of trademark infringement. While Southern Steer is not contractually obligated to protect franchisees against claims of infringement or unfair competition involving the marks, it is their policy to do so when their counsel believes protection is required.
Southern Steer will cover costs, including attorney's fees and court costs, for any litigation they choose to bring or defend to protect the franchisee's use of the licensed marks. However, Southern Steer does not indemnify franchisees for expenses or damages they incur. Franchisees are required to fully cooperate with Southern Steer in any litigation for their benefit, and Southern Steer will control any administrative proceeding or litigation involving the marks.
However, if another party establishes superior rights to the marks, franchisees must use the alternative service marks, trademarks, or trade names that Southern Steer requires. This means that while Southern Steer may assist in protecting the trademark, the franchisee ultimately bears the risk of having to change their branding if a superior claim is established.
This arrangement is fairly typical in franchising, where the franchisor owns the trademarks but the franchisee uses them under license. Franchisees should be aware of the potential costs and disruptions associated with trademark disputes, even when the franchisor provides some level of support.