What is Camp Margaritaville's licensor's obligation regarding indemnification of the licensee against third-party intellectual property claims?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
any breach of this Agreement by Licensee that Licensor may choose to bring, Licensor shall, at Licensor's cost and expense, employ counsel of its own choice to direct the handling of such claims and any settlement thereof. Licensor shall be entitled to receive and retain all amounts awarded as damages, profits or otherwise in connection with such suits.
8. Indemnification.
- a. Indemnification by Licensee. Licensee shall defend, indemnify, and hold Licensor, and its Affiliates, and their respective officers, directors, employees, agents, attorneys, heirs, members, successors, parents and assigns of the foregoing, harmless against and in respect of any and all losses arising from any and all third-party actions, suits, proceedings, demands, assessments, judgments, costs and expenses (including reasonable attorneys' fees and expenses) arising out of Licensee's use or sublicense of the Margaritaville Intellectual Property, including, without limitation, injury, wrongful death, negligence or battery claims by customers of the Resort, except claims by a third party, based on facts or circumstances not otherwise disclosed in Schedule 2 of the Trademark Agreements, that use of the Margaritaville Intellectual Property pursuant to the terms of this Agreement infringes or otherwise violates a third party's intellectualproperty rights
- b. Indemnification by Licensor. Licensor shall defend, indemnify and hold Licensee and its officers, directors, employees, agents, attorneys, members, successors, parents and assigns harmless against and in respect of any and all losses arising from any and all third-party actions, suits, proceedings, demands, assessments, judgments, costs and expenses (including reasonable attorneys' fees and expenses) based on facts not otherwise disclosed in Schedule 2 of the Trademark Agreements, that (i) use of the Sub-Licensed Marks according to this Agreement, which are either registered or allowed for registration in the class of goods or services of the infringement or alleged infringement, infringes or otherwise violates such third party's intellectual property rights;
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to the 2025 FDD, Camp Margaritaville's licensor is obligated to defend, indemnify, and hold the licensee harmless against losses from third-party actions related to intellectual property claims under specific conditions. This obligation applies to actions, suits, proceedings, demands, assessments, judgments, costs, and expenses, including reasonable attorneys' fees.
Specifically, the licensor's indemnification applies when the use of sub-licensed marks, which are either registered or allowed for registration, infringes or violates a third party's intellectual property rights. For a mark to be considered "allowed for registration," it must be approved by the United States Patent and Trademark Office and have passed the opposition period without opposition. The licensor also provides indemnification for the use of sub-licensed trade dress and Margaritaville artwork provided by or on behalf of the licensor and used according to the agreement, if such use infringes or violates a third party's intellectual property rights.
The licensee is required to promptly notify the licensor of any demands, claims, or suits for which indemnification may be sought, providing full details of the situation. Furthermore, in the event of infringement claims by third parties against the licensee, the licensor has the sole right to direct and control the defense and settlement of such claims at the licensor's expense, unless the claims are based on a breach of the agreement by the licensee. These rights must be exercised reasonably and not in an arbitrary or capricious manner. This framework ensures that Camp Margaritaville franchisees are protected from intellectual property claims arising from their authorized use of the brand's trademarks and artwork, provided they adhere to the terms of the franchise agreement.