Under what circumstances does 360 Painting indemnify Minnesota franchisees against trademark infringement claims?
360_Painting Franchise · 2025 FDDAnswer from 2025 FDD Document
The Minnesota Department of Commerce requires that a franchisor indemnify Minnesota Franchisees against liability to third parties resulting from claims by third parties that the franchisee's use of the franchisor's trademark infringes upon the trademark rights of the third party. The franchisor does not indemnify against the consequences of a franchisee's use of a franchisor's trademark except in accordance with the requirements of the franchise agreement, and as the condition to an indemnification, the franchisee must provide notice to the franchisor of any such claim immediately and tender the defense of the claim to the franchisor. If the franchisor accepts tender of defense, the franchisor has the right to manage the defense of the claim, including the right to compromise, settle or otherwise resolve the claim, or to determine whether to appeal a final determination of the claim.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 42–46)
What This Means (2025 FDD)
According to the 2025 FDD, 360 Painting is required by the Minnesota Department of Commerce to indemnify its Minnesota franchisees against liability to third parties if a third party claims that the franchisee's use of 360 Painting's trademark infringes upon the third party's trademark rights. However, this indemnification is not unconditional.
360 Painting does not provide indemnification if the franchisee's use of the trademark is not in accordance with the franchise agreement. Furthermore, for 360 Painting to provide indemnification, the franchisee must notify 360 Painting of any such claim immediately and offer 360 Painting the defense of the claim.
If 360 Painting accepts the defense, it has the right to manage the defense of the claim. This includes the right to compromise, settle, or otherwise resolve the claim, and to decide whether to appeal any final determination related to the claim. This level of control is typical in franchising, as the franchisor has a vested interest in protecting its brand and trademarks.