Under what circumstances will Closet Storage Concepts indemnify a franchisee for trademark infringement?
Closet_Storage_Concepts Franchise · 2025 FDDAnswer from 2025 FDD Document
5.8.2 Protection. Franchisee shall promptly notify Franchisor 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. If Franchisor or Licensor undertakes the defense or prosecution of any litigation pertaining to any of the Proprietary Marks, Franchisee agrees to execute any and all documents and do such acts and things as may, in the opinion of counsel for Franchisor or Licensor, be necessary to carry out such defense or prosecution.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2025 FDD)
According to the 2025 Closet Storage Concepts Franchise Disclosure Document, Closet Storage Concepts will indemnify a franchisee against trademark infringement claims under specific conditions. Closet Storage Concepts will protect the franchisee from suits, proceedings, demands, obligations, actions, or claims, including costs and reasonable attorneys' fees, if the alleged infringement arises solely from the franchisee's use of the Proprietary Marks in accordance with the Franchise Agreement or as instructed in writing by Closet Storage Concepts.
However, this protection is contingent upon the franchisee promptly notifying Closet Storage Concepts of any such claim and fully cooperating in the defense against it. This means a franchisee cannot delay reporting a potential infringement issue or act independently in a way that could compromise the legal defense.
Furthermore, the agreement stipulates that if Closet Storage Concepts or its licensor takes on the defense or prosecution of any litigation related to the Proprietary Marks, the franchisee must execute all necessary documents and actions as deemed necessary by the counsel for Closet Storage Concepts or its licensor. This underscores the franchisee's obligation to actively support Closet Storage Concepts's legal strategy in protecting its trademarks.