Does the Distribution Agreement require Bw Premier Collection to participate in the defense or indemnify a franchisee in a proceeding involving a Licensed Mark?
Bw_Premier_Collection Franchise · 2025 FDDAnswer from 2025 FDD Document
The Distribution Agreement does not obligate us to protect your right to use the Licensed Marks, or to protect you against claims of infringement or unfair competition arising out of your use of the Licensed Marks. The Distribution Agreement does not obligate you to notify us of the use of, or claims of rights to, a trademark identical to or confusingly similar to a Licensed Mark. If you do provide us with notice of these uses or claims, the Distribution Agreement does not require us to take affirmative action. The Distribution Agreement does not give us or you the right to control any administrative proceedings or litigation involving the Licensed Marks. The Distribution Agreement does not require us to participate in your defense and/or indemnify you for expenses or damages if you are a party to an administrative or judicial proceeding involving a Licensed Mark, or if the proceeding is resolved unfavorably to you. You have no rights under the Distribution Agreement if we require you to modify or discontinue using a Licensed Mark.
Source: Item 13 — Trademarks (FDD pages 38–39)
What This Means (2025 FDD)
According to the 2025 Bw Premier Collection Franchise Disclosure Document, the Distribution Agreement does not require Bw Premier Collection to participate in the defense and/or indemnify a franchisee for expenses or damages if the franchisee is involved in an administrative or judicial proceeding involving a Licensed Mark, or if the proceeding is resolved unfavorably to the franchisee. This means that Bw Premier Collection franchisees are responsible for their own legal defense and any associated costs if they face legal challenges related to the use of Bw Premier Collection's Licensed Marks.
This lack of obligation extends to various aspects of trademark protection. The Distribution Agreement does not obligate Bw Premier Collection to protect a franchisee's right to use the Licensed Marks or to defend against claims of infringement or unfair competition. Furthermore, franchisees are not required to notify Bw Premier Collection of any similar trademark uses or claims, and even if they do, Bw Premier Collection is not obligated to take any action. Neither Bw Premier Collection nor the franchisee has the right to control administrative proceedings or litigation involving the Licensed Marks under the Distribution Agreement.
This arrangement places the burden of trademark-related legal issues squarely on the franchisee. If Bw Premier Collection requires a franchisee to modify or discontinue using a Licensed Mark, the franchisee has no recourse under the Distribution Agreement. Prospective franchisees should be aware of this potential risk and consider obtaining their own legal counsel to understand the implications of using the Licensed Marks. They may also want to inquire about insurance options that cover trademark infringement claims.
In the franchise industry, it is not uncommon for franchisors to offer some level of support or indemnification to franchisees in trademark-related legal matters. However, the extent of this support can vary significantly. Some franchisors may provide legal assistance, while others may offer financial indemnification for certain expenses. The fact that Bw Premier Collection's Distribution Agreement does not include these protections is a notable point for potential franchisees to consider.