Does the City Publications indemnification agreement include infringement of trademarks, patents, or copyrights?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees to hold harmless and indemnify Franchisor and its Affiliates and Franchisor's respective members, partners, shareholders, officers, directors, employees and agents and successors or assigns (collectively "Franchisor Indemnitees") from and against all losses, damages, fines, costs, expenses, lost profits, loss, damages, or liability (including attorneys' fees and all other costs of litigation) incurred in connection with any action, suit, demand, claim, investigation, proceeding or inquiry, or any settlement thereof which arises from or is based upon (a) Franchisee's ownership or operation of the Franchised Business; (b) violation, breach or asserted violation or breach of any federal, state or local law, regulation or rule; (c) breach of any representation, warranty, covenant, or provision of this Agreement or any other agreement between Franchisee on the one hand and Franchisor or Franchisor's Affiliates on the other; (d) libel, slander or other form of defamation of Franchisor or the System by Franchisee; (e) acts, errors or omissions incurred in connection with or arising out of the Franchised Business, including any negligent or intentional acts; or (f) infringement, violation or alleged infringement or violation of any Mark, patent or copyright or any misuse of the Confidential Information. In addition, Franchisee shall indemnify Franchisor Indemnitees for any and all losses, compensatory damages, exemplary or punitive damages, fines, charges, costs, expenses, lost profits, settlement amounts, judgments, damages to Franchisor's reputation and goodwill, costs of advertising material, media time and space and substituting and replacing the same, all costs of recall, refunds, compensation, all public notices and other such amounts which may arise or result from any of the actions, commissions or items listed in this Section.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, the franchise agreement includes an indemnification clause that requires the franchisee to protect City Publications from certain losses. Specifically, the franchisee must indemnify City Publications against losses, damages, fines, costs, expenses, lost profits, or liability (including attorneys' fees and litigation costs) arising from various actions or claims.
This indemnification extends to claims related to the franchisee's operation of the franchised business, violations of laws or regulations, breaches of the franchise agreement, defamation of City Publications, and negligent or intentional acts. Critically, the indemnification also covers any infringement, violation, or alleged infringement or violation of any Mark, patent, or copyright, as well as any misuse of confidential information. This means that if a franchisee's actions lead to a claim of intellectual property infringement against City Publications, the franchisee would be responsible for covering the associated costs and damages.
Furthermore, the franchisee is liable for all losses, compensatory damages, exemplary or punitive damages, fines, charges, costs, expenses, lost profits, settlement amounts, judgments, damages to City Publications' reputation and goodwill, costs of advertising material, media time and space and substituting and replacing the same, all costs of recall, refunds, compensation, all public notices and other such amounts which may arise or result from any of the actions, commissions or items listed in this Section. This broad language suggests that City Publications intends for franchisees to bear significant responsibility for any legal or financial repercussions resulting from their actions related to the franchise.
This type of indemnification agreement is common in franchising, as it aims to protect the franchisor from liabilities arising from the franchisee's operations. However, prospective City Publications franchisees should carefully review this section of the franchise agreement with legal counsel to fully understand the scope of their indemnification obligations and potential financial exposure.