Under what circumstances will Annex Brands indemnify a franchisee against damages related to trademark infringement?
Annex_Brands Franchise · 2025 FDDAnswer from 2025 FDD Document
E 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.
Source: Item 22 — Contracts (FDD pages 109–110)
What This Means (2025 FDD)
According to the 2025 FDD, Annex Brands will indemnify a franchisee against damages if the franchisee's use of any mark, while in compliance with the Franchise Agreement, is held to constitute trademark infringement, unfair competition, or dilution. This indemnification extends to all damages incurred by the franchisee or for which the franchisee is held liable in any proceeding related to these issues. Annex Brands will also reimburse the franchisee for all costs reasonably incurred in defending against such claims or proceedings.
However, this indemnification is conditional. The franchisee must notify Annex Brands of any such claim or proceeding within 30 days of learning about it and must otherwise comply with all terms of the Franchise Agreement. Annex Brands retains the right to control the defense of any such claim.
Importantly, Annex Brands is not obligated to indemnify or reimburse the franchisee for any fees or disbursements of any attorney retained directly by the franchisee. This means that while Annex Brands will cover the costs of defense, it will only do so if it controls the legal strategy and representation.