What actions must a Stretch Zone franchisee take to assist in protecting Stretch Zone's intellectual property in litigation?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
If there is any claim of infringement, unfair competition or other challenge to your right to use the Principal Trademark or any of the other marks and Intellectual Property, or if you become aware of any use of, or claims to, any of the Intellectual Property by persons other than us or our Franchisees, you will promptly (within 7 days) notify us in writing. You will not communicate with anyone except our counsel and us on any infringement, challenge or claim except under judicial process. We have sole discretion as to whether we take any action on any infringement, challenge or claim. We have the sole right to control any litigation or other proceeding arising out of any infringement of, challenge to, or claim to any Intellectual Property. You must sign all documents, render all assistance, and do all acts that our attorneys consider necessary or advisable in order to protect and maintain our interest in any litigation or proceeding involving the Intellectual Property or otherwise to protect and maintain our interests in the Intellectual Property. We indemnify you against and will reimburse you for all damages and costs (including reasonable attorneys' fees and costs) for which you are held liable in any proceeding based on your use of any of the Intellectual Property in accordance with the Franchise Agreement, provided you: (a) have timely notified us of the claim or proceeding; (b) have otherwise complied with the Franchise Agreement; (c) allow us sole control of the defense and settlement of the action; and (d) cooperate fully with our counsel in the defense of the action.
Source: Item 13 — ITEM -13 TRADEMARKS (FDD pages 58–60)
What This Means (2025 FDD)
According to the 2025 Stretch Zone Franchise Disclosure Document, franchisees play a crucial role in protecting Stretch Zone's intellectual property. If a franchisee becomes aware of any potential infringement, unfair competition, or challenges to the use of Stretch Zone's trademarks or intellectual property, they must promptly notify Stretch Zone in writing within 7 days. It is imperative that the franchisee only communicates about the issue with Stretch Zone's counsel and Stretch Zone itself, unless compelled by judicial process. This ensures that all communications are aligned with Stretch Zone's legal strategy.
Stretch Zone retains sole discretion over whether to take action on any infringement, challenge, or claim related to its intellectual property. The company also has the sole right to control any litigation or other proceeding arising from such infringements or claims. Therefore, franchisees must cede control of any legal action to Stretch Zone.
To assist Stretch Zone in protecting its intellectual property, a franchisee is obligated to sign all necessary documents, provide all assistance, and perform all actions that Stretch Zone's attorneys deem necessary or advisable. This cooperation is essential for Stretch Zone to effectively protect and maintain its interests in any litigation or proceeding involving its intellectual property. In return for the franchisee's cooperation, Stretch Zone will indemnify the franchisee against all damages and costs, including reasonable attorney's fees, for which the franchisee is held liable in any proceeding based on their use of Stretch Zone’s intellectual property, provided the franchisee meets certain conditions. These conditions include timely notification of the claim, compliance with the Franchise Agreement, allowing Stretch Zone sole control of the defense and settlement, and full cooperation with Stretch Zone's counsel.
This arrangement is fairly typical in franchising, as franchisors need to maintain tight control over their brand and intellectual property. Franchisees benefit from this arrangement through indemnification, which protects them from financial losses due to intellectual property disputes, provided they adhere to the franchisor's guidelines.