What costs will Deer Solution indemnify a franchisee for if they are sued for trademark infringement?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 23: RECEIPTS]
11.E. INDEMNIFICATION OF FRANCHISEE
If Franchisee is sued in a legal proceeding or is threatened with legal action and/or a notice of infringement by a third party where the claims and/or causes of action directly relate to a third party claiming trademark infringement, unfair competition, and/or trademark dilution as a result of Franchisee's use of the Licensed Marks in accordance with the terms of this Agreement and the System (the "IP Claim"), then Franchisor shall indemnify Franchisee for the reasonable and direct costs incurred by Franchisee and/or a judgment entered against Franchisee, provided: (i) Franchisee immediately notified Franchisor of the IP Claim by a written notice sent to Franchisor via priority overnight courier; (ii) Franchisee provided and afforded Franchisor the absolute opportunity and right to defend against the IP Claim and to select and appoint legal counsel of Franchisor's choosing; and (iii) Franchisee utilized the Licensed Marks in accordance with the terms of this Agreement and the System. Franchisee agrees that time is of the essence with respect to notifying Franchisor of the IP Claim in accordance with this Agreement, including this Article 11.E.
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, if a franchisee faces a legal proceeding or threat of legal action due to a third-party claim of trademark infringement, unfair competition, or trademark dilution resulting from the franchisee's use of Deer Solution's Licensed Marks, Deer Solution will indemnify the franchisee. This protection applies only if the franchisee used the Licensed Marks according to the franchise agreement and system standards.
Deer Solution's indemnification covers the reasonable and direct costs the franchisee incurs, as well as any judgment entered against the franchisee. However, the franchisee must immediately notify Deer Solution of the Intellectual Property Claim (IP Claim) through written notice via priority overnight courier.
Furthermore, the franchisee must give Deer Solution the absolute right and opportunity to defend against the IP Claim and to select legal counsel of its choosing. The FDD emphasizes that timely notification of any IP Claim is crucial for the franchisee to receive indemnification under the agreement.