If Beard Papas defends a trademark infringement claim, is Beard Papas obligated to reimburse the franchisee's attorney fees?
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.
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 defend against infringement claims, provided the franchisee uses the marks correctly. Beard Papas will indemnify the franchisee against direct damages from trademark infringement if the franchisee's use complies with the Franchise Agreement, manuals, and written instructions. The franchisee must also promptly notify Beard Papas of the claim and allow Beard Papas to control the defense and settlement.
However, Beard Papas is not obligated to cover the franchisee's attorney fees if Beard Papas defends the claim. This means that if a franchisee chooses to hire their own attorney in addition to Beard Papas's legal team, they will be responsible for those costs. This is a common arrangement in franchising, as it allows the franchisor to maintain control over the legal strategy while still offering some protection to franchisees.
This policy has important implications for prospective Beard Papas franchisees. While Beard Papas will cover direct damages, franchisees need to be aware that they may incur legal expenses if they decide to seek independent counsel during a trademark dispute. Franchisees should factor this potential cost into their financial planning and consider whether additional legal protection is necessary.