Does the Franchise Agreement require Canine Dimensions to indemnify a franchisee for expenses or damages in a trademark proceeding?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
You must notify us immediately when you learn about an infringement of or challenge to your use of a Mark. We will take the action we think appropriate and control any litigation or other proceeding arising out of any such infringement or challenge to the Marks. The Franchise 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 trademark licensed by us to you, or if the proceeding is resolved unfavorably to you.
Source: Item 13 — TRADEMARKS (FDD pages 25–26)
What This Means (2025 FDD)
According to Canine Dimensions's 2025 Franchise Disclosure Document, the Franchise Agreement does not require Canine Dimensions to participate in a franchisee's defense or indemnify them for expenses or damages if the franchisee is involved in an administrative or judicial proceeding regarding a trademark licensed to them by Canine Dimensions, especially if the proceeding's outcome is unfavorable to the franchisee.
This means that if a franchisee is sued for trademark infringement related to the use of Canine Dimensions's trademarks, the franchisee will likely be responsible for their own legal defense costs and any resulting damages. Canine Dimensions retains the right to control any litigation arising from infringement or challenges to the marks. However, they are not obligated to cover the franchisee's expenses or losses.
This is a significant risk for franchisees, as trademark litigation can be expensive and time-consuming. While Canine Dimensions will take action they deem appropriate and control any litigation, the franchisee bears the financial burden if they are directly involved in a trademark dispute. Prospective franchisees should carefully consider this potential liability and factor it into their financial planning. It is advisable to seek legal counsel to fully understand the implications of this provision in the Franchise Agreement.