Is Best Western required to participate in a franchisee's defense or indemnify them for damages in a copyright proceeding?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
You must notify us immediately of any apparent infringement or challenge to your use of any Best Western Identifying Marks, or of any person's claim of any rights in any Best Western Identifying Marks, and you may not communicate with any person other than us, our attorneys, and your attorneys, regarding any infringement, challenge, or claim. We may take the action we deem appropriate (including no action) and control exclusively any litigation, USPTO proceeding, or other administrative proceeding arising from any infringement, challenge, or claim. You must assist us in protecting and maintaining our interests in any litigation or USPTO proceeding or other administrative proceeding. We will reimburse you for expenses incurred by you as the direct result of activities undertaken by you at our prior written request and specifically relating to the trademark dispute at issue. We will not reimburse you for any other expenses incurred by you for cooperating with us or our affiliates. You must timely notify us and comply with our directions in response to a trademark infringement proceeding that disputes your authorized use of the Best Western Identifying Marks and we may, at our option, defend and/or control the defense of any proceeding arising from your use of any Best Western Identifying Marks.
Member shall indemnify, defend, and hold harmless Best Western and its subsidiaries and affiliates and its and their respective directors, officers, employees, agents, representatives, insurers, and other Members (hereinafter collectively referred to as "Indemnitees" and individually referred to as "Indemnitee"), from any and all claims, demands, suits, actions, proceedings, losses, liabilities, penalties, causes of action, and damages of every kind and description, including but not limited to any attorneys' fees and costs and expenses (hereinafter collectively referred to as "Losses" and individually referred to as "Loss"), whether or not a lawsuit or other type of action is filed, which may be brought, made, alleged, or claimed by a third party arising out of (or contributed to, in whole or in part, by reason of) any alleged act, omission, fault, mistake, wrongdoing, or negligence of Member or its directors, officers, employees, agents, representatives, or contractors, in connection with, relating to, or incident to the use, condition, or operation of the Property. For the avoidance of doubt, this shall include but is not limited to Losses arising out of, in connection with, relating to, or incident to: (a) Member's (or its directors', officers', employees', agents', representatives', or contractors') failure to comply with applicable law; (b) workers' compensation claims, unemployment disability compensation claims, or discrimination or other employmentrelated claims of employees or contractors of Member; (c) breach of contract claims, data privacy claims, PCI-DSS claims, consumer deception claims, or tort claims; and (d) infringement related to intellectual property rights (e.g., patent, trademark, copyright). Member shall not settle any Loss against an Indemnitee without the Indemnitee's prior written consent.
Source: Item 14 — Patents, Copyrights, and Proprietary Information (FDD pages 86–87)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, Best Western may, at its option, defend and/or control the defense of any proceeding arising from a franchisee's use of any Best Western Identifying Marks. The franchisee must notify Best Western immediately of any apparent infringement or challenge to their use of any Best Western Identifying Marks. The franchisee must also assist Best Western in protecting and maintaining its interests in any litigation or USPTO proceeding or other administrative proceeding. Best Western will reimburse the franchisee for expenses incurred as a direct result of activities undertaken at Best Western's prior written request and specifically relating to the trademark dispute at issue. Best Western will not reimburse the franchisee for any other expenses incurred for cooperating with Best Western or its affiliates.
However, the franchisee is required to indemnify, defend, and hold harmless Best Western from any claims, demands, suits, actions, proceedings, losses, liabilities, penalties, causes of action, and damages arising out of any alleged act, omission, fault, mistake, wrongdoing, or negligence of the Member. This includes losses arising out of infringement related to intellectual property rights such as copyright. The franchisee shall not settle any Loss against an Indemnitee without the Indemnitee's prior written consent.
These obligations and potential costs should be carefully considered by prospective franchisees. It is common in franchising for the franchisor to control trademark-related litigation to protect the brand, but the specific allocation of costs and responsibilities can vary significantly. Franchisees should consult with an attorney to fully understand their obligations and potential liabilities under the franchise agreement.