What are the conditions that must be met for Checkers to indemnify a Checkers franchisee for costs incurred defending a claim brought against them for authorized use of a Mark?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
- 5.05 Indemnification of Franchisee.
We agree to indemnify you against, and to reimburse you for, all damages for which you are held liable in any proceeding arising out of your authorized use of any Mark pursuant to and in compliance with this Agreement and, except as provided herein, for all costs you reasonably incur in defending any such claim brought against you, provided: (i) you timely notified us of such claim pursuant to Section 5.04, and (ii) that you and your Owners and Affiliates are in compliance with this Agreement and all other agreements with us or any of our Affiliates.
We, at our sole discretion, are entitled to prosecute, defend and/or settle any proceeding arising out of your use of any Mark pursuant to this Agreement, and, if we undertake to prosecute, defend and/or settle any such matter, we will have no obligation to indemnify or reimburse you for any fees or disbursements of any legal counsel or other advisors you may have retained.
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkers' 2025 Franchise Disclosure Document, Checkers will indemnify a franchisee against damages for which they are held liable in a proceeding arising out of the franchisee's authorized use of any Mark, and will reimburse the franchisee for costs reasonably incurred defending such a claim.
However, this indemnification is conditional. First, the franchisee must have notified Checkers of the claim in a timely manner, as outlined in Section 5.04 of the franchise agreement. Second, the franchisee, their owners, and their affiliates must be in compliance with the franchise agreement and all other agreements they have with Checkers or its affiliates.
Checkers retains the right to control the defense or settlement of any claim arising from the use of a Mark. If Checkers chooses to handle the legal proceedings, they are not obligated to reimburse the franchisee for any legal counsel or advisor fees the franchisee may have incurred.