Under what conditions will Byrider indemnify and hold the licensee harmless regarding legal actions?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensor, at its own expense, shall defend any and all claims, actions and causes of actions brought against Licensee to the extent that it is based on a claim that the Licensed System infringes a patent, copyright, or intellectual or industrial property right of any person, firm, or corporation not a party to this Agreement, provided
- that (a) Licensee promptly notifies Licensor of any potential or threatened claims and the commencement of any such legal action, (b) Licensee has not by any act of commission or omission prejudiced Licensor's ability to successfully defend such litigation, and (c) Licensor shall have exclusive control of the defense to such legal action and of all negotiations for settlement or compromise.
If these conditions are met, Licensor shall indemnify and hold Licensee harmless with respect to all costs and damages actually awarded against Licensee arising out of such legal action, subject to the limitations of Section 20.
In the event that the Licensed System becomes, or in Licensor's opinion is likely to become, the subject of a claim of infringement of a patent, copyright, or other intellectual or industrial property right of any person, firm or corporation not a party to this Agreement, Licensor may, at its option, either secure Licensee's right to continue using the Licensed System, replace or modify the Licensed System so as to make it non-infringing without materially impairing the Licensed System's utility, or, if neither of these alternatives is reasonably available to Licensor, terminate this Agreement upon one (1) month's written notice.
In the event that Licensor elects to so terminate this Agreement to avoid infringement within twelve (12) months of delivery of the Licensed system to Licensee, then Licensor shall refund to Licensee the price paid for usage, login, and security rights to the software under this Agreement according to the percentage of days within that twelve (12) month period that Licensee did not have access to the Licensed System.
If, however, Licensee notifies Licensor in writing during the one (1) month after Licensor's notice of termination under this Section that Licensee elects to continue to be licensed with respect to the Licensed System, then Licensee shall undertake, at Licensee's expense, the defense of any such legal action against Licensee and/or Licensor arising from Licensee's use of the Licensed System and shall indemnify and hold Licensor harmless with respect to all costs, damages, and attorney fees actually incurred and attributable to such continued use or further defense of said legal action after such notice is given to Licensor.
Licensor shall have no liability to Licensee if the alleged infringement is based upon a use other than of a current, unaltered version of the Licensed System available from Licensor or upon a use or combination of the Licensed System with programs or data not supplied by Licensor.
The foregoing states the entire liability of Licensor with respect to infringement.
Licensee's Indemnification.
The Licensed System permits the Licensee to create its own retail installment sales and security contracts for which Licensee is solely responsible.
Licensee is solely responsible for its use, preparation and transmission of Customer Data and the accuracy of Customer Data, or any other aspect, including, for example, Annual Percentage Rate Calculations, of any retail installment sales and security contract created by Licensee through its use of the Licensed System.
Licensee shall indemnify and hold Licensor harmless against claim, action, or cause of action which arises from the use of the Licensed System by Licensee under this Agreement including, but not limited to, attorneys fees actually incurred, costs, expenses, damages, judgments, awards, and penalties, provided that the same does not arise solely from Licensor's negligence or willful misconduct.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, Byrider will indemnify and hold the licensee harmless under specific conditions related to intellectual property infringement. Byrider will defend claims brought against the licensee if the claim is based on the Licensed System infringing on intellectual property rights of a third party. For this indemnification to apply, the licensee must promptly notify Byrider of any potential claims or legal actions, must not prejudice Byrider's ability to defend the litigation, and Byrider must have exclusive control over the defense and settlement negotiations. If these conditions are met, Byrider will cover all costs and damages awarded against the licensee, subject to certain limitations.
However, the extent of Byrider's liability is limited to the fees paid by the licensee for using the licensed system during the 12 months preceding the event that led to the liability. If Byrider chooses to terminate the agreement to avoid infringement within 12 months of delivering the Licensed System, they will refund the licensee a portion of the price paid for software usage rights, based on the number of days the licensee did not have access to the system.
Conversely, the franchisee also has indemnification responsibilities. The franchisee must indemnify Byrider against claims arising from the use of the Licensed System, including attorney fees, costs, expenses, damages, judgments, awards, and penalties, unless the claim arises solely from Byrider's negligence or willful misconduct. The franchisee is responsible for the retail installment sales and security contracts they create using the Licensed System, as well as the accuracy of customer data. If the licensee continues to use the Licensed System after Byrider provides notice of potential infringement, the licensee will defend any legal action and indemnify Byrider for all costs and damages.