What action must a Browns Chicken franchisee take to be eligible for indemnification regarding a claim or proceeding related to the use of a Mark?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Brown agrees to indemnify Franchisee against and to reimburse Franchisee for all direct, but not consequential (including, but not limited to, loss or revenue and/or profits), damages for which Franchisee is held liable in any proceeding arising out of Franchisee's use of any Mark pursuant to and in compliance with this Agreement and for all costs reasonably incurred by Franchisee in the defense of any such claim brought against it or in any such proceeding in
which Franchisee is named as a party, provided that Franchisee has notified Brown of any such claim or proceeding in compliance with Paragraph C of this Section 17.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, to be eligible for indemnification against damages from claims or proceedings related to the use of any Mark, a franchisee must notify Browns Chicken of any such claim or proceeding in compliance with Paragraph C of Section 17 of the franchise agreement. This notification requirement is a prerequisite for Browns Chicken's agreement to indemnify the franchisee for direct damages, but not consequential damages like lost revenue or profits.
In practical terms, this means that if a Browns Chicken franchisee faces a lawsuit or claim due to their use of the Browns Chicken trademarks, they must promptly inform Browns Chicken about it. Failure to do so could jeopardize their right to be indemnified, meaning Browns Chicken would not be obligated to cover the franchisee's legal costs or any damages awarded against them.
This condition highlights the importance of clear and timely communication between the franchisee and Browns Chicken. Franchisees should familiarize themselves with Paragraph C of Section 17 to understand the specific requirements for providing notice of claims or proceedings. This ensures they can take the necessary steps to protect their right to indemnification under the franchise agreement.
Browns Chicken's indemnification only extends to direct damages, excluding consequential damages such as lost revenue or profits. Additionally, Browns Chicken's indemnification does not apply if the franchisee contributed to the harm.