What is the Camp Margaritaville licensee's obligation regarding notification if a claim is made for which indemnification may be required?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
- c.
Notification.
If any demand, claim or suit is asserted or instituted with respect to which a party may be entitled to indemnification under the foregoing provisions, such party shall give prompt notice thereof to the party who or which may be liable for indemnification, including full details to the extent known.
- d.
Third-Party Intellectual Property Claims.
With respect to infringement claims by third parties against Licensee asserting that the License or Sublicense of the Margaritaville Intellectual Property infringes their rights, Licensee shall give prompt notice thereof to Licensor and Licensor shall have the sole right to direct and control the defense and settlement of such claims at Licensor's sole expense, unless such claims are based on the breach of this Agreement
by Licensee, in which case such costs shall be borne exclusively by Licensee. Such rights shall not be exercised in an arbitrary or capricious manner.
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to the 2025 Camp Margaritaville FDD, if any demand, claim, or suit is initiated where a party may be entitled to indemnification, that party must promptly notify the party potentially liable for indemnification. This notification should include full details of the claim, to the extent known.
This means that if a Camp Margaritaville licensee faces a legal claim for which they believe the licensor should cover the costs (indemnification), they must inform the licensor as soon as possible. The notification must contain all available details about the claim. This ensures the licensor is aware of the situation and can prepare to take appropriate action.
For claims of infringement by third parties against the licensee asserting that the License or Sublicense of the Margaritaville Intellectual Property infringes their rights, the licensee must give prompt notice to the licensor. The licensor then has the sole right to direct and control the defense and settlement of such claims at the licensor's sole expense, unless such claims are based on the breach of the Agreement by the licensee, in which case such costs shall be borne exclusively by the licensee. These rights shall not be exercised in an arbitrary or capricious manner.
This process protects both parties by ensuring open communication and allowing the appropriate party to take responsibility for the claim. It also outlines who bears the costs depending on the nature of the claim, particularly regarding intellectual property infringement.