What is the scope of the indemnity that Operated Locations, Participating Franchisee or Sub-Franchisee provides to Dq Treat's GIFT regarding third-party claims, losses, liabilities, and damages?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
[Item 17: The following paragraph is added to the end of Item 17 of the Disclosure Document:]
Operated Locations, Participating Franchisee or Sub-Franchisee agrees to indemnify GIFT, its directors, officers, employees and agents from and against all third party claims, losses, liabilities and damages (including reasonable attorneys' fees and costs of settlement) resulting from or arising out of any allegation that materials supplied by Client or Operated Locations, Participating Franchisee or Sub-Franchisee (including trademarks, artwork, designs and specifications) misappropriate or infringe such third party's U.S. copyright, trademark, patent or other intellectual property right, except to the extent that such allegation arises from GIFT's use of such materials other than in compliance with (a) this Agreement or (b) any relevant instructions supplied by Client or Operated Locations, Participating Franchisee or Sub-Franchisee.
[Item 17: The following paragraph is added to the end of Item 17 of the Disclosure Document:]
Operated Locations, Participating Franchisee or Sub-Franchisee further agrees to indemnify GIFT, its directors, officers, employees, and agents from and against any and all third party claims, losses, liabilities and damages (including reasonable attorneys' fees and costs of settlement) resulting from or arising out of GIFT's compliance with Operated Locations, Participating Franchisee or Sub- Franchisee's instructions, orders or specifications. "Affiliate" means, with respect to either party, any entity controlling, controlled by or under common control with such party.
- Intellectual Property.
GIFT agrees to indemnify Operated Locations, Participating Franchisee or Sub-Franchisee, its directors, officers, employees and agents from and against all third party claims, losses, liabilities and damages (including reasonable attorneys' fees and costs of settlement) resulting from or arising out of any allegation that GIFT's Software misappropriate or infringe such third party's U.S. copyright, trademark, patent or other intellectual property right, except to the extent that such allegation arises from (i) Operated Locations, Participating Franchisee or Sub-Franchisee's use of Software other than in compliance with this Agreement and any documentation supplied by GIFT, (ii) Operated Locations, Participating Franchisee or Sub-Franchisee's use of Software in combination with other software, equipment, systems, services, processes, components or elements not provided by GIFT, if the infringement or misappropriation would not have occurred but for such use or combination, or (iii) modifications or development requested by Client or Operated Locations, Participating Franchisee or Sub-Franchisee, using designs, instructions or specifications provided or approved by Client or Operated Locations, Participating Franchisee or Sub-Franchisee.
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to Dq Treat's 2025 Franchise Disclosure Document, Operated Locations, Participating Franchisees, or Sub-Franchisees agree to indemnify GIFT (First Data Resources, LLC) from third-party claims, losses, liabilities, and damages. This includes reasonable attorneys' fees and settlement costs. The indemnity applies to allegations that materials supplied by the franchisee, such as trademarks, artwork, designs, and specifications, misappropriate or infringe a third party's U.S. intellectual property rights (copyright, trademark, or patent).
However, this indemnity does not apply if the allegation arises from GIFT's use of the franchisee-supplied materials in a way that doesn't comply with the Participation Agreement or any relevant instructions provided by the franchisee.
Additionally, Operated Locations, Participating Franchisees, or Sub-Franchisees also agree to indemnify GIFT, its directors, officers, employees, and agents from any third party claims, losses, liabilities, and damages (including reasonable attorneys' fees and costs of settlement) resulting from or arising out of GIFT's compliance with the franchisee's instructions, orders, or specifications. In contrast, GIFT agrees to indemnify the franchisee from claims that GIFT's software infringes a third party's intellectual property rights, with certain exceptions for unauthorized use or modifications of the software by the franchisee.