In Minnesota, what is the deadline for a Chem Dry franchisee to provide notice to the company of a trademark infringement claim to be eligible for indemnification?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
Item 13 is modified as follows: The Minnesota Department of Commerce requires that a Franchisor indemnify Minnesota franchisees against liability to third parties resulting from claims by third parties that the Franchisee's use of the Trademark infringes Trademark rights of the third party. The Company does not indemnify against the consequences of the Franchisee's use of the Company's Trademark except in accordance with the requirements of the Franchise Agreement, and, as a condition to indemnification, the Franchisee must provide notice to the Company of any such claim within 10 days and tender the defense of the claim to the Company. If the Company accepts the tender of defense, the Company has 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 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, Minnesota franchisees must provide notice to Chem Dry of any trademark infringement claim within 10 days to be eligible for indemnification. The Minnesota Department of Commerce requires that Chem Dry indemnify its Minnesota franchisees against liability to third parties resulting from claims that the franchisee's use of the trademark infringes on the trademark rights of a third party. However, Chem Dry only provides indemnification if the franchisee adheres to the requirements of the Franchise Agreement, including the timely notice.
This means that if a Chem Dry franchisee in Minnesota is sued for trademark infringement related to their use of the Chem Dry trademark, they must notify Chem Dry within 10 days of the claim. This allows Chem Dry to take control of the defense of the claim, including managing the defense, settling the claim, or deciding whether to appeal any determination.
Failing to provide notice within the 10-day window could result in the franchisee losing their right to indemnification from Chem Dry. This could leave the franchisee responsible for covering all legal costs and any potential damages resulting from the infringement claim. This requirement highlights the importance of franchisees understanding and adhering to the notification requirements outlined in the Franchise Agreement to protect their interests and maintain eligibility for indemnification.