Under what circumstances will Amorino reimburse an Amorino franchisee for costs associated with litigation relating to the Proprietary Marks or Copyrighted Materials?
Amorino Franchise · 2025 FDDAnswer from 2025 FDD Document
Amorino shall defend you against any third-party claim, suit, or demand arising out of your use of the Proprietary Marks or the Copyrighted Materials at its own expense provided that Amorino, in its sole discretion, determines that you have used the Proprietary Marks and Copyrighted Materials in accordance with this Agreement. In the event of any litigation relating to your use of the Proprietary Marks or Copyrighted Materials, you shall execute any and all documents and do such acts as may, in the opinion of Amorino, be necessary to carry out such defense or prosecution, including, but not limited to, becoming a nominal party to any legal action. Except to the extent that such litigation is the result of your use of the Proprietary Marks or Copyrighted Materials in a manner inconsistent with the terms of this Agreement, Amorino agrees to reimburse you for your associated costs.
Source: Item 22 — CONTRACTS (FDD pages 80–81)
What This Means (2025 FDD)
According to Amorino's 2025 Franchise Disclosure Document, Amorino will defend a franchisee against third-party claims arising from the franchisee's use of Amorino's Proprietary Marks or Copyrighted Materials, provided that Amorino determines the franchisee used them in accordance with the franchise agreement. Amorino bears the expenses for this defense.
However, if litigation arises from a franchisee's use of the Proprietary Marks or Copyrighted Materials in a way that violates the franchise agreement, Amorino may not cover the franchisee's associated costs. In cases where Amorino does agree to defend the franchisee, the franchisee must cooperate by executing documents and performing actions necessary for the defense or prosecution, potentially including becoming a nominal party in legal action.
In cases where Amorino does defend the franchisee, Amorino will reimburse the franchisee for associated costs, unless the litigation results from the franchisee using the Proprietary Marks or Copyrighted Materials in a manner inconsistent with the terms of the agreement. This means that franchisees need to adhere strictly to the guidelines provided by Amorino regarding the use of trademarks and copyrighted materials to ensure they are protected in case of legal disputes.
This arrangement is fairly typical in franchising, where the franchisor controls the brand's intellectual property and has a vested interest in protecting it. Franchisees benefit from this protection as long as they follow the franchisor's guidelines, but they also bear the risk of non-compliance.