Will Best Brains reimburse a franchisee for costs incurred in defending a claim of trademark infringement?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
We will indemnify you against, and reimburse you for, all damages for which you are held liable in any proceeding in which your use of any Mark, pursuant to and in compliance with the Franchise Agreement, is held to constitute trademark infringement, unfair competition or dilution, and for all costs reasonably incurred by you in the defense of any claim brought against you or in any proceeding in which you are named as a party, provided that you have timely notified us of the claim or proceeding and have otherwise complied with the Franchise Agreement. We, in our discretion, will be entitled to defend any proceeding arising out of your use of any Mark pursuant to the Franchise Agreement, and, if we undertake the defense of the proceeding, we will have no obligation to indemnify or reimburse you for any fees or disbursements of counsel you retain.
Source: Item 13 — TRADEMARKS (FDD pages 29–30)
What This Means (2025 FDD)
According to Best Brains's 2025 Franchise Disclosure Document, Best Brains will indemnify a franchisee against damages for which the franchisee is held liable in a proceeding where their use of a Best Brains mark, compliant with the Franchise Agreement, is deemed trademark infringement, unfair competition, or dilution. Best Brains will also reimburse the franchisee for costs reasonably incurred in defending against such claims, provided the franchisee has promptly notified Best Brains of the claim and has otherwise complied with the Franchise Agreement.
However, Best Brains retains the right to defend any proceeding arising from the franchisee's use of a Best Brains mark under the Franchise Agreement. If Best Brains chooses to defend the proceeding, they are not obligated to indemnify or reimburse the franchisee for any fees or disbursements of counsel the franchisee retains.
This means that if a franchisee is sued for trademark infringement related to their use of the Best Brains trademarks, and they have followed the terms of the franchise agreement, Best Brains will cover the damages and defense costs, unless Best Brains decides to take over the defense themselves. In that case, the franchisee would not be reimbursed for their own legal counsel. This is a fairly typical arrangement in franchising, as it allows the franchisor to control the defense of their trademarks, which are a critical asset for the entire franchise system.