Under what circumstances will Bang Cookies indemnify a franchisee against an IP Claim?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
11.E. INDEMNIFICATION OF FRANCHISEE
If Franchisee is sued in a legal proceeding or is threatened with legal action and/or a notice of infringement by a third party where the claims and/or causes of action directly relate to a third party claiming trademark infringement, unfair competition, and/or trademark dilution as a result of Franchisee's use of the Licensed Marks in accordance with the terms of this Agreement and the System (the "IP Claim"), then Franchisor shall indemnify Franchisee for the reasonable and direct costs incurred by Franchisee and/or a judgment entered against Franchisee, provided: (i) Franchisee immediately notified Franchisor of the IP Claim by a written notice sent to Franchisor via priority overnight courier; (ii) Franchisee provided and afforded Franchisor the absolute opportunity and right to defend against the IP Claim and to select and appoint legal counsel of Franchisor's choosing; and (iii) Franchisee utilized the Licensed Marks in accordance with the terms of this Agreement and the System. Franchisee agrees that time is of the essence with respect to notifying Franchisor of the IP Claim in accordance with this Agreement, including this Article 11.E.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, Bang Cookies will indemnify a franchisee if the franchisee is sued or threatened with legal action due to claims of trademark infringement, unfair competition, or trademark dilution resulting from the franchisee's use of the licensed marks, provided that the franchisee adheres to the terms of the franchise agreement and the Bang Cookies system.
For Bang Cookies to provide indemnification, the franchisee must immediately notify Bang Cookies of the IP Claim via written notice sent by priority overnight courier. The franchisee must also provide Bang Cookies with the absolute opportunity and right to defend against the IP Claim, including the right to select and appoint legal counsel of Bang Cookies' choosing. Furthermore, the franchisee must have used the licensed marks in accordance with the terms of the franchise agreement and the Bang Cookies system.
This indemnification covers the reasonable and direct costs incurred by the franchisee and/or any judgment entered against the franchisee. It is crucial for a prospective Bang Cookies franchisee to understand these conditions, as failure to comply with the notification and usage requirements could result in the franchisee being responsible for their own legal defense and any resulting judgments.