Regarding copyright infringement claims, is a Stretch Zone franchisee allowed to communicate with anyone other than Stretch Zone's counsel and Stretch Zone itself?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
If there is any claim of copyright infringement, unfair competition or other challenge to your right to use of any Copyright, or if you become aware of any use of, or claims to, any Copyright 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 Copyright. You must sign all documents, render all assistance, and do all acts that our attorneys deem necessary or advisable in order to protect and maintain our interest in any litigation or proceeding involving the Copyright or otherwise to protect and maintain our interests in the Copyright. 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 Copyright 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 14 — ITEM -14 PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 60–62)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, a franchisee facing a copyright infringement claim or becoming aware of potential copyright issues is strictly limited in who they can communicate with. Specifically, the franchisee is only permitted to communicate with Stretch Zone's legal counsel and Stretch Zone itself regarding the matter, unless required to do so under judicial process. This restriction is in place to ensure that Stretch Zone maintains control over any legal proceedings and can protect its copyright interests effectively. Franchisees must notify Stretch Zone in writing within 7 days of any claim or awareness of copyright issues.
This requirement means a Stretch Zone franchisee cannot discuss the claim with other franchisees, external legal advisors (unless under judicial process), or any other third party without Stretch Zone's explicit consent. This is a significant obligation, as it centralizes the handling of copyright matters with the franchisor. The franchisee must also sign documents and provide assistance as deemed necessary by Stretch Zone's attorneys to protect the company's interests.
Stretch Zone retains sole discretion over whether to take action on any infringement, challenge, or claim and has the sole right to control any related litigation. In return for the franchisee's adherence to these communication restrictions and cooperation, Stretch Zone offers indemnification. Stretch Zone will cover damages and costs, including reasonable attorney's fees, for which the franchisee is held liable in a proceeding related to the use of any copyright, provided the franchisee has met specific conditions. These conditions include timely notification, compliance with the Franchise Agreement, allowing Stretch Zone sole control over the defense and settlement, and full cooperation with Stretch Zone's counsel.
This arrangement is fairly typical in franchising, where the franchisor owns the intellectual property and needs to maintain a unified legal strategy. However, it places a significant responsibility on the franchisee to act quickly and communicate exclusively with Stretch Zone on copyright matters. Franchisees should be aware of these obligations and ensure they understand the process for reporting and handling potential copyright issues.