What are the conditions for Best Brains to reimburse a franchisee's costs in defending a trademark infringement claim?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
If your use of any Marks in compliance with this Agreement is held to constitute trademark infringement, unfair competition, or dilution, we will indemnify you for all damages for which you are held liable. We will also reimburse you for all costs reasonably incurred in the defense of any such claim provided that a) you timely notified us of such claim or proceeding, b) You otherwise complied with this Agreement and, c) We have the right to defend any such claim.
If we undertake to defend such claim, then we have no obligation to indemnify or reimburse you for any fees or disbursements of counsel you retain.
Source: Item 23 — RECEIPTS (FDD pages 42–190)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, Best Brains will indemnify a franchisee for damages if the franchisee's use of Best Brains' marks, in compliance with the franchise agreement, is held to constitute trademark infringement, unfair competition, or dilution. In addition to covering damages, Best Brains will reimburse the franchisee for costs reasonably incurred in defending such a claim.
However, this reimbursement is conditional. The franchisee must have promptly notified Best Brains of the claim or proceeding. The franchisee must have otherwise complied with the franchise agreement. Critically, Best Brains must have the right to defend the claim. If Best Brains undertakes the defense, they are not obligated to reimburse the franchisee for any fees or disbursements of counsel the franchisee retains independently.
This arrangement is fairly typical in franchising. The franchisor owns the trademarks and has a vested interest in controlling their defense. By retaining control, Best Brains can ensure a consistent legal strategy and minimize potential damage to the brand. The franchisee benefits from Best Brains' expertise and financial resources in trademark matters, but must cede control of the legal defense to receive reimbursement.