Under what conditions will Checkers indemnify a franchisee against damages for which they are held liable in a proceeding arising out of the authorized use of any Checkers Mark?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
We will indemnify you against, and reimburse you for, all damages for which you are held liable in any proceeding arising out of your authorized use of any Mark under the
Franchise Agreement and, except as provided in the Franchise Agreement, for all costs you reasonably incur in defending any claim brought against you or any proceeding in which you are named as a party, if you have timely notified us of such claim or proceeding and you and your owners are in compliance with the Franchise Agreement and all other agreements entered into with us and our affiliates. At our sole discretion, we will be entitled to prosecute, defend or settle any proceeding arising out of your use of any Mark, and, if we decide to prosecute, defend or settle any such matter, we will have no obligation to indemnify or reimburse you for any fees or disbursements of counsel retained by you.
Source: Item 13 — TRADEMARKS (FDD pages 61–63)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, Checkers will indemnify a franchisee against damages for which they are held liable in a proceeding arising out of the authorized use of any Checkers Mark under the Franchise Agreement. Checkers will also reimburse the franchisee for all costs reasonably incurred in defending any claim brought against them or any proceeding in which they are named as a party.
However, this indemnification and reimbursement are contingent upon the franchisee having timely notified Checkers of such claim or proceeding. Furthermore, both the franchisee and their owners must be in full compliance with the Franchise Agreement and all other agreements entered into with Checkers and its affiliates to be eligible for indemnification.
Checkers retains the sole discretion to prosecute, defend, or settle any proceeding arising out of the franchisee's use of any Mark. If Checkers decides to handle the matter themselves, they will have no obligation to indemnify or reimburse the franchisee for any fees or disbursements of counsel retained by the franchisee. This means a franchisee might lose control over their legal defense and might not be compensated for their legal expenses if Checkers takes over the case.
This arrangement is fairly typical in franchising, where the franchisor wants to maintain control over trademark-related legal matters to protect the brand's reputation and consistency. However, it places a significant responsibility on the franchisee to promptly report any potential trademark issues to Checkers and to adhere strictly to all agreements to ensure they are covered by the indemnification.