What are the dependencies for Beard Papas to indemnify a franchisee against trademark infringement?
Beard_Papas Franchise · 2025 FDDAnswer from 2025 FDD Document
We will protect your right to use the Licensed Marks and other related rights and to protect you against claims of infringement and unfair competition related to the Licensed Marks, provided that you use the Licensed Marks in accordance with the terms of your Franchise Agreement, as designated by us in the Manuals, and otherwise, as we instruct you. We will indemnify you against direct damages for trademark infringement in a proceeding arising out of your use of the Licensed Marks, provided your use of the Licensed Marks comply with the terms of your Franchise Agreement, the Manuals, our written instructions and, that you have timely notified us of the claim, have given us sole control of the defense and settlement of the claim, and you are in compliance with your Franchise Agreement and, if applicable, Multi-Unit Development Agreement. If we defend the claim, we have no obligation to indemnify or reimburse you with respect to any fees or disbursements of any attorney that you retain.
If any third party establishes, to our satisfaction and in our discretion that its rights to the Licensed Marks are, for any legal reason, superior to any of our rights or of a nature that we believe, in our discretion, that it is advisable to discontinue and/or modify the Licensed Marks, then we will modify and/or replace the Licensed Marks and you must use the substitutions, replacements and/or variations of and/or to the Licensed Marks and use the those trademarks, service marks, logos and trade names required and designated by us. In such event, our sole liability and obligation will be to reimburse you for the direct out-of-pocket costs of complying with this obligation, which you must document to our satisfaction, including, by way of example, alterations in signage and replacement of marketing materials.
Source: Item 13 — TRADEMARKS (FDD pages 40–42)
What This Means (2025 FDD)
According to Beard Papas's 2025 Franchise Disclosure Document, Beard Papas will protect a franchisee's right to use the Licensed Marks and related rights, including protection against claims of infringement and unfair competition. However, this protection is contingent on the franchisee using the Licensed Marks in accordance with the Franchise Agreement, the Manuals, and any written instructions provided by Beard Papas.
Beard Papas will indemnify a franchisee against direct damages for trademark infringement arising from the use of Licensed Marks, provided the franchisee meets several conditions. These conditions include compliance with the terms of the Franchise Agreement, the Manuals, and Beard Papas's written instructions. Additionally, the franchisee must promptly notify Beard Papas of any claim, grant Beard Papas sole control over the defense and settlement of the claim, and remain in compliance with the Franchise Agreement and any applicable Multi-Unit Development Agreement.
If Beard Papas defends the claim, they are not obligated to cover the fees or disbursements of any attorney retained by the franchisee. This means that while Beard Papas will handle the legal defense, the franchisee will be responsible for their own legal costs if they choose to hire separate counsel. This is a fairly standard arrangement in franchising, as it allows the franchisor to maintain control over the legal strategy and outcome.
In the event a third party establishes superior rights to the Licensed Marks, Beard Papas may modify or replace the Licensed Marks. In such a case, the franchisee must use the substituted or modified marks as directed by Beard Papas. Beard Papas's sole obligation in this scenario is to reimburse the franchisee for the direct out-of-pocket costs of complying with this change, such as alterations in signage and replacement of marketing materials, provided these costs are documented to Beard Papas's satisfaction.