Is Bombs Away required to indemnify a franchisee for expenses or damages in a copyright proceeding?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
12.3 Infringement.
- (a) Defense of Franchisee. If Franchisee has used the Marks in accordance with this Agreement, then (i) Bombs Away Franchising shall defend Franchisee (at Bombs Away Franchising's expense) against any Action by a third-party alleging infringement by Franchisee's use of a Mark, and (ii) Bombs Away Franchising will indemnify Franchisee for expenses and damages if the Action is resolved unfavorably to Franchisee.
- (b) Infringement by Third Party. Franchisee shall promptly notify Bombs Away Franchising if Franchisee becomes aware of any possible infringement of a Mark by a third party. Bombs Away Franchising may, in its sole discretion, commence or join any claim against the infringing party.
- (c) Control. Bombs Away Franchising shall have the exclusive right to control any prosecution or defense of any Action related to possible infringement of or by the Marks.
Source: Item 14 — Patents, Copyrights, and Proprietary Information (FDD pages 25–26)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, under Section 12.3(a), Bombs Away will defend a franchisee against any action by a third party alleging infringement through the franchisee's use of a mark, provided the franchisee has used the marks in accordance with the franchise agreement. Bombs Away will cover the franchisee's expenses and damages if the action is resolved unfavorably to the franchisee. This protection applies specifically to claims of trademark or service mark infringement related to the Bombs Away marks.
Section 12.3(c) states that Bombs Away retains exclusive control over the prosecution or defense of any action related to possible infringement of or by the marks. This means that while Bombs Away will provide the defense and indemnity, they also have the sole right to manage the legal proceedings. The franchisee must promptly notify Bombs Away of any potential infringement by a third party, as detailed in Section 12.3(b), allowing Bombs Away to take appropriate action.
This section clarifies the responsibilities and protections related to the use of Bombs Away's trademarks. It ensures that franchisees who properly use the Marks as instructed are defended and indemnified against infringement claims. However, it also emphasizes that Bombs Away maintains control over any legal actions related to the Marks, which is a common arrangement in franchising to protect brand consistency and integrity.