Under what condition will Anago reimburse a Subfranchisor for out-of-pocket expenses related to litigation or proceedings involving Proprietary Marks?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 5.5 - Indemnification of the Subfranchisor
Franchisor will indemnify Subfranchisor against and will reimburse Subfranchisor for all damages for which Subfranchisor is held liable in any proceeding arising solely from Subfranchisor's use of any Proprietary Mark, provided that such use was in strict accordance with this Agreement, or as otherwise authorized by Franchisor in writing, and for all costs reasonably incurred by Subfranchisor in the defense of any claim brought against Subfranchisor or in any such proceeding in which Subfranchisor is named as a party, if Subfranchisor: (i) has timely notified Franchisor of the claim or proceeding in accordance with Subsection 5.6(a); (ii) has otherwise complied with this Agreement; and (iii) allows Franchisor sole control of the defense and settlement of the action in accordance with Subse
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Anago will indemnify and reimburse a Subfranchisor for damages they are held liable for in proceedings arising solely from the Subfranchisor's use of any Proprietary Mark. This is provided that the Subfranchisor's use was in strict accordance with the agreement or otherwise authorized by Anago in writing.
Additionally, Anago will cover costs reasonably incurred by the Subfranchisor in defending against claims or proceedings where they are named as a party. However, this is contingent upon the Subfranchisor: (i) notifying Anago of the claim or proceeding in a timely manner according to Subsection 5.6(a); (ii) complying with all other terms of the agreement; and (iii) allowing Anago to have sole control over the defense and settlement of the action, as detailed in the subsequent subsection.
This means that if a Subfranchisor is sued for using Anago's trademarks correctly as outlined in the franchise agreement, Anago will cover the damages and legal costs. However, the Subfranchisor must keep Anago informed and allow them to manage the legal defense to qualify for this coverage. This indemnification protects the Subfranchisor from liabilities arising from authorized use of Anago's brand elements, but places conditions on the Subfranchisor to maintain compliance and communication.