What must a Closet Storage Concepts franchisee do to be indemnified against trademark infringement claims?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
of any infringement of, or challenge to, the Proprietary Marks, and Franchisor or Licensor, shall in its discretion take the action it
deems appropriate. Franchisee must not communicate with any person other than legal counsel, Franchisor and Franchisor's legal representative in connection with any infringement challenge or claim. Franchisor shall indemnify and hold Franchisee harmless from any suits, proceedings, demands, obligations, actions or claims, including costs and reasonable attorneys' fees, for any alleged infringement under federal or state trademark law arising solely from Franchisee's use of the Proprietary Marks in accordance with this Agreement or as otherwise set forth by Franchisor in writing if Franchisee has promptly notified Franchisor of such claim and cooperated in the defense of any claim.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to Closet Storage Concepts' 2025 Franchise Disclosure Document, a franchisee will be indemnified against trademark infringement claims if they meet certain conditions. Closet Storage Concepts will protect the franchisee from any lawsuits, proceedings, demands, obligations, actions, or claims, including costs and reasonable attorney's fees, related to alleged infringement under federal or state trademark law. This protection applies only if the infringement arises solely from the franchisee's use of Closet Storage Concepts' proprietary marks, and if that use is in accordance with the Franchise Agreement or as otherwise instructed by Closet Storage Concepts in writing.
To be eligible for indemnification, the franchisee must promptly notify Closet Storage Concepts of any trademark infringement claim. Additionally, the franchisee must cooperate in the defense of any such claim. The franchisee is also restricted from communicating with anyone other than their legal counsel, Closet Storage Concepts, and Closet Storage Concepts' legal representative regarding any infringement challenge or claim.
This means that a Closet Storage Concepts franchisee needs to be vigilant in protecting the brand's trademarks and must follow the franchisor's guidelines for using them. By adhering to these guidelines and promptly reporting any potential infringement, the franchisee can be shielded from legal liabilities associated with trademark disputes. This is a fairly standard clause in franchise agreements, as franchisors want to maintain control over their brand and protect it from misuse, while franchisees need assurance that they won't be held liable for using the brand name as directed.