Under what conditions will Anago indemnify a Subfranchisor against damages arising from the use of a Proprietary Mark?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Subsection 5.6(b).
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, Anago will indemnify a Subfranchisor against damages if the Subfranchisor is held liable in a proceeding arising solely from the Subfranchisor's use of any Proprietary Mark. This protection applies only if the Subfranchisor's use of the Proprietary Mark was in strict accordance with the franchise agreement or otherwise authorized by Anago in writing. Additionally, Anago will cover all costs reasonably incurred by the Subfranchisor in defending against any claim or proceeding in which the Subfranchisor is named as a party.
However, this indemnification is contingent upon the Subfranchisor meeting certain conditions. First, the Subfranchisor must promptly notify Anago of the claim or proceeding. Second, the Subfranchisor must otherwise comply with all terms of the franchise agreement. Third, the Subfranchisor must allow Anago to have sole control over the defense and settlement of the action.
This indemnification clause is a significant benefit for Anago Subfranchisors, as it provides financial protection against potential legal claims related to the use of Anago's Proprietary Marks. However, it's crucial for Subfranchisors to adhere strictly to the terms of the franchise agreement and to follow Anago's instructions regarding the use of the Proprietary Marks to ensure they are covered by this indemnification. Failure to comply with these conditions could result in the Subfranchisor being responsible for their own legal defense and any resulting damages.