Does the Boulder Designs indemnification for trademark use apply to litigation between the franchisor and franchisee where the franchisee's use of the marks is disputed?

According to Boulder Designs' 2025 Franchise Disclosure Document, the franchisor's indemnification for trademark use does not extend to litigation between Boulder Designs and a franchisee when the franchisee's use of the marks is in dispute. This means that if Boulder Designs sues a franchisee over trademark usage, the franchisee cannot expect Boulder Designs to cover their legal expenses.

This exclusion has significant financial implications for prospective Boulder Designs franchisees. Should a dispute arise regarding trademark use, the franchisee would be solely responsible for all legal costs, including attorney fees, court costs, and any damages awarded to Boulder Designs. These costs can be substantial and could significantly impact the franchisee's financial stability.

Furthermore, the FDD specifies that this indemnification does not cover the expense for franchisees to remove signage or discontinue the use of the marks. It also does not apply to any separate legal fees or costs incurred by the franchisee in seeking independent counsel separate from the counsel representing Boulder Designs and the franchisee in the event of litigation disputing the use of the marks. Therefore, it is crucial for potential franchisees to fully understand and comply with Boulder Designs' trademark usage guidelines to minimize the risk of such disputes and associated costs.