Under what circumstances is a Dq Treat Operated Location, Participating Franchisee, or Sub-Franchisee required to indemnify GIFT for third-party claims?
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 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.
[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.
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, an Operated Location, Participating Franchisee, or Sub-Franchisee must indemnify GIFT (First Data Resources, LLC) against third-party claims under two specific circumstances.
First, the franchisee must indemnify GIFT from third-party claims, losses, liabilities, and damages (including attorney's fees and settlement costs) that arise from GIFT's compliance with the franchisee's instructions, orders, or specifications. This means if GIFT acts on the franchisee's specific directions and it leads to a claim from someone else, the franchisee is responsible for protecting GIFT from those claims.
Second, the franchisee is obligated to indemnify GIFT against claims that materials they supplied (including trademarks, artwork, designs, and specifications) infringe on a third party's intellectual property rights like copyrights, trademarks, or patents. However, this indemnification is not required if GIFT uses those materials in a way that doesn't comply with the Participation Agreement or relevant instructions provided by the franchisee.