Under what conditions will Carvel indemnify a franchisee against trademark infringement claims in Minnesota?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
The Minnesota Department of Commerce requires us to indemnify Minnesota franchisees against liability to third parties resulting from claims by third parties that the franchisee's use of our trademark infringes on trademark rights of the third party. We do not indemnify against the consequences of a franchisee's use of our trademark except in accordance with the requirements of the Franchise Agreement; and, as a condition to indemnification, you must: (i) provide prompt notice to us of any such claim; (ii) tender the defense of the claim to us; and (iii) cooperate with us in the defense against the claim. If we accept the tender of defense, we have the right to manage the defense of the claim including the right to compromise, settle, or otherwise resolve the claim, and to determine whether to appeal a final determination of the claim.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, the Minnesota Department of Commerce requires Carvel to indemnify its Minnesota franchisees against liability to third parties resulting from claims that the franchisee's use of Carvel's trademark infringes on the trademark rights of a third party. However, this indemnification is not unconditional. Carvel does not provide indemnification except in accordance with the requirements of the Franchise Agreement.
To be eligible for indemnification, a Carvel franchisee in Minnesota must meet certain conditions. First, the franchisee must provide prompt notice to Carvel of any such claim. Second, the franchisee must tender the defense of the claim to Carvel. Finally, the franchisee must cooperate with Carvel in the defense against the claim.
If Carvel accepts the tender of defense, it retains the right to manage the defense of the claim. This includes the right to compromise, settle, or otherwise resolve the claim, and to determine whether to appeal a final determination of the claim. This level of control is typical in franchising, as the franchisor has a vested interest in protecting its brand and trademarks.