Under what condition will Brightstar Care defend a franchisee against a third-party claim disputing the franchisee's authorized use of Brightstar Care's Licensed Marks?
Brightstar_Care Franchise · 2025 FDDAnswer from 2025 FDD Document
Unless it is established that a third party claim asserted against you is based, directly or indirectly, on your misuse of the Licensed Marks or the BrightStar Care Agency Program, we agree to defend you against a third party claim disputing your authorized use of any Licenses Mark or the BrightStar Care Agency Program, provided you have notified us immediately after learning of the claim and fully cooperate in defending the action. Because we will defend this particular third-party claim, you are not entitled to be reimbursed for legal or other professional fees or costs paid to independent legal counsel or others in connection with the matter. However, we will reimburse your actual out-of-pocket damages suffered (but not any lost profits or consequential damages) if it is determined in the action that we did not in fact have the right to authorize you to use the Licensed Mark or the BrightStar Care Agency Program. This reimbursement obligation does not impact our rights and your obligations under Section 5.5 of this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 117–118)
What This Means (2025 FDD)
According to Brightstar Care's 2025 Franchise Disclosure Document, Brightstar Care will defend a franchisee against a third-party claim disputing the franchisee's authorized use of any Licensed Mark or the Brightstar Care Agency Program if the claim is not based on the franchisee's misuse of the Licensed Marks or the Brightstar Care Agency Program. The franchisee must also notify Brightstar Care immediately after learning of the claim and fully cooperate in defending the action.
However, the FDD specifies that if Brightstar Care defends the franchisee against such a third-party claim, the franchisee will not be reimbursed for legal or other professional fees or costs paid to independent legal counsel or others in connection with the matter. Brightstar Care will, however, reimburse the franchisee's actual out-of-pocket damages suffered (excluding lost profits or consequential damages) if it is determined in the action that Brightstar Care did not have the right to authorize the franchisee to use the Licensed Mark or the Brightstar Care Agency Program.
This arrangement is fairly typical in franchising. Franchisors often retain control over legal defense related to trademarks to ensure consistent brand protection. The franchisee's responsibility to notify Brightstar Care immediately and cooperate fully is also standard, as it allows Brightstar Care to mount an effective defense. The exclusion of reimbursement for the franchisee's legal fees is a point to consider, as it means the franchisee may bear some costs even when Brightstar Care is handling the defense.