What section of the Annex Brands Franchise Agreement discusses indemnification of the franchisee and discontinuance of use of marks?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
- D.
INDEMNIFICATION OF FRANCHISEE/DISCONTINUANCE OF USE OF MARKS.
Franchisor agrees to indemnify Franchisee against, and to reimburse Franchisee for, all damages incurred by it or for which it is held liable in any proceeding in which Franchisee's use of any Mark under and in compliance with this Agreement is held to constitute trademark infringement, unfair competition or dilution, and for all costs reasonably incurred by Franchisee in the defense of any such claim brought against it or in any such proceeding in which it is named
as a party, provided that Franchisee has notified Franchisor of such claim or proceeding within 30 days of learning of the claim or proceeding and has otherwise complied with this Agreement. Franchisor will have the right to control the defense of any such claim. Franchisor will have no obligation to indemnify or reimburse Franchisee with respect to any fees or disbursements of any attorney retained by Franchisee.
E. DISCONTINUANCE OF USE OF MARKS. If it becomes advisable at any time, in Franchisor's sole discretion, for Franchisor and/or Franchisee to modify or discontinue use of any Mark, and/or to use 1 or more additional or substitute trademarks or service marks, Franchisee agrees to comply with Franchisor's instructions in that regard within a reasonable time after written notice thereof by Franchisor. Franchisor will have no liability or obligation whatsoever with respect to Franchisor's modification or discontinuance of any Mark.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 Annex Brands Franchise Disclosure Document, Section 5.E discusses the discontinuance of use of marks, while Section 5.D outlines the indemnification of the franchisee.
Section 5.D states that Annex Brands will indemnify the franchisee against damages incurred due to trademark infringement, unfair competition, or dilution resulting from the franchisee's compliant use of Annex Brands' marks. Annex Brands will also reimburse the franchisee for reasonable costs incurred in defending against such claims, provided the franchisee notifies Annex Brands within 30 days of learning about the claim and complies with the agreement. However, Annex Brands is not obligated to cover attorney fees incurred by the franchisee. Annex Brands retains the right to control the defense of any such claim.
Section 5.E addresses situations where Annex Brands deems it advisable to modify or discontinue the use of any mark. In such cases, the franchisee must comply with Annex Brands' instructions within a reasonable time after receiving written notice. Annex Brands bears no liability or obligation regarding the modification or discontinuance of any mark.
For a prospective Annex Brands franchisee, this means they are protected from certain legal liabilities associated with using Annex Brands' trademarks, provided they adhere to the agreement and notify Annex Brands promptly of any claims. However, they must also be prepared to adapt to changes in Annex Brands' branding and discontinue using certain marks if instructed, without any recourse for potential losses incurred due to these changes.