Under what conditions will Degree Wellness indemnify a Minnesota franchisee against damages in a trademark infringement proceeding?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
With respect to the disclosures in Item 13 of the Disclosure Document, the Disclosure Document and the Franchise Agreement state that we have discretion to control any litigation or other proceeding arising out of any actual or alleged infringement, challenging, or claim relating to any Mark, and that we will (i) indemnify you against all damages for which you are held liable in any trademark infringement proceeding arising out of your use of any Mark under and in compliance with your Franchise Agreement; and (ii) reimburse for all costs you reasonable incur
in defending the claim; however, you must have timely notified us of the claim, and complied with your Franchise Agreement. Minnesota law requires that the Disclosure Document and Franchise Agreement must state that the franchisor will protect the franchisee's right to use the trademarks, service marks, trade names, logotypes, or other commercial symbols, and/or indemnify the franchisee from any loss, costs, or expenses arising out of any claim, suit, or demand regarding the use of the same.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to the 2025 Degree Wellness Franchise Disclosure Document, Degree Wellness will indemnify a Minnesota franchisee against damages for which they are held liable in a trademark infringement proceeding if the claim arises out of the franchisee's use of any mark under and in compliance with their Franchise Agreement. In addition to indemnification against damages, Degree Wellness will reimburse the franchisee for all costs reasonably incurred in defending the claim.
However, this indemnification is conditional. The franchisee must have notified Degree Wellness of the claim in a timely manner and must have complied with all terms of the Franchise Agreement. Minnesota law mandates that the franchise agreement and disclosure document must state that Degree Wellness will protect the franchisee's right to use trademarks, service marks, trade names, logotypes, or other commercial symbols, and/or indemnify the franchisee from any losses, costs, or expenses arising out of claims related to their use.
This protection ensures that Degree Wellness franchisees in Minnesota are not left to bear the full financial burden of trademark infringement claims that arise from following the franchisor's system. However, it is crucial for franchisees to adhere to the notification requirements and operate in compliance with the Franchise Agreement to be eligible for indemnification and reimbursement.