Under what circumstances does Dq Treat's GIFT indemnify the Operated Locations, Participating Franchisee or Sub-Franchisee against third-party claims related to intellectual property?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
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, GIFT (First Data Resources, LLC) agrees to indemnify Operated Locations, Participating Franchisees, or Sub-Franchisees, including their directors, officers, employees, and agents, from third-party claims, losses, liabilities, and damages, including attorney's fees and settlement costs. This indemnification applies to allegations that GIFT's Software misappropriates or infringes a third party's U.S. copyright, trademark, patent, or other intellectual property rights.
However, this indemnification does not apply under certain conditions. Specifically, GIFT is not responsible if the allegation arises from (i) the franchisee's use of the Software in a way that doesn't comply with the Participation Agreement or GIFT's documentation, (ii) the franchisee's use of the Software in combination with other software, equipment, systems, services, processes, components, or elements not provided by GIFT, where the infringement would not have occurred otherwise, or (iii) modifications or development requested by the Client or franchisee using designs, instructions, or specifications they provided or approved.
In practical terms, this means that Dq Treat franchisees are protected from intellectual property claims related to the software GIFT provides, as long as they use the software as intended and do not modify it or combine it with unauthorized elements. Franchisees should ensure they adhere to the Participation Agreement and GIFT's documentation to maintain this protection. If a franchisee uses the software in an unapproved manner or requests modifications, they could lose this indemnification and become responsible for any resulting intellectual property claims.