Is Anago required to defend franchisees against copyright infringement claims related to their use of copyrighted work?

According to Anago's 2025 Franchise Disclosure Document, Anago is not required to defend its franchisees against copyright infringement claims. Specifically, the FDD states that Anago is not obligated by the Subfranchise Rights Agreement to defend franchisees against any claims related to their use of copyrighted material. This means that if a franchisee is sued for copyright infringement related to materials they use in their Anago business, Anago is not contractually bound to provide legal defense or cover any associated costs.

This lack of obligation places a significant risk on the franchisee. Should a copyright infringement claim arise, the franchisee would be solely responsible for the legal defense, which can be expensive. It is important for prospective franchisees to understand this potential liability and consider obtaining their own insurance or legal counsel to mitigate this risk.

While Anago is not required to defend franchisees, the FDD does state that franchisees are obligated to notify Anago immediately upon any infringement or challenge to their use of copyrighted work. Anago retains sole discretion to take any action it deems appropriate in such situations. This clause suggests that while Anago is not obligated to act, they may choose to do so at their discretion.

In summary, while Anago maintains control over the copyrighted materials and requires franchisees to report any potential infringements, the financial and legal burden of defending against copyright claims falls entirely on the franchisee. This is a crucial point for potential franchisees to consider when evaluating the Anago franchise opportunity.