Regarding intellectual property claims related to Stretch Zone, what is a prohibited action for the franchisee?
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 Stretch Zone's 2025 Franchise Disclosure Document, if a franchisee becomes aware of any potential infringement or challenges to Stretch Zone's intellectual property, they are required to notify Stretch Zone promptly in writing, within 7 days. The franchisee is explicitly prohibited from communicating with anyone about the infringement, challenge, or claim, except for Stretch Zone's counsel and Stretch Zone itself, and only under judicial process. This means a franchisee cannot independently discuss the matter with third parties or take any unilateral action.
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 issues. Franchisees are obligated to sign documents, provide assistance, and perform any actions deemed necessary or advisable by Stretch Zone's attorneys to protect and maintain the company's interests in any litigation or proceeding involving the intellectual property.
Stretch Zone offers indemnification to franchisees against 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 or proceeding, compliance with the Franchise Agreement, allowing Stretch Zone sole control over the defense and settlement of the action, and full cooperation with Stretch Zone's counsel in the defense of the action. This indemnification clause offers some protection to franchisees, but it is contingent on their adherence to Stretch Zone's directives and procedures in handling intellectual property matters.
This approach is fairly standard in franchising, as franchisors typically want to maintain tight control over their brand and intellectual property. By centralizing the handling of infringement claims, Stretch Zone aims to ensure consistent and strategic management of its intellectual property assets. Franchisees must understand that while they are protected under certain conditions, they must relinquish control over legal proceedings and follow Stretch Zone's instructions to maintain that protection.