What are some examples of defense costs that a 7 Brew franchisee is responsible for under the indemnification clause?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
We agree to reimburse your damages and expenses incurred in any trademark infringement proceeding disputing your authorized use of any Mark under this Agreement, provided your use has been consistent with this Agreement, the Operations Manual, and Brand Standards communicated to you, and you have timely notified us of, and complied with our directions in responding to, the proceeding. At our option, we and/or our affiliate(s) may defend and control the defense of any proceeding arising from or relating to your use of any Mark under this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 82–83)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, 7 Brew's franchisor agrees to cover a franchisee's expenses in trademark infringement proceedings if the franchisee's use of the trademark was authorized and consistent with the franchise agreement, operations manual, and brand standards. The franchisee must also promptly notify 7 Brew of any proceedings and follow their directions in responding to it. At 7 Brew's discretion, they or their affiliates can manage the defense of any proceeding related to the franchisee's use of a mark under the agreement.
However, the FDD excerpt does not provide specific examples of defense costs for which a 7 Brew franchisee would be responsible under an indemnification clause. The document only outlines the conditions under which 7 Brew will cover the franchisee's expenses in trademark disputes.
Therefore, a prospective 7 Brew franchisee should ask the franchisor for a comprehensive list of potential defense costs they might incur under the indemnification clause. Understanding these potential costs is crucial for assessing the financial risks associated with the franchise.