Under what circumstances is Punchh obligated to indemnify Dq Treat franchisees against infringement claims?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
Punchh shall indemnify, defend, and hold harmless Customer, its affiliates and franchisees, and each of their respective officers, directors, employees, and agents (together, a "Customer Indemnitee") from and against any actions, liabilities, damages, obligations, costs and expenses (including reasonable attorneys' fees and costs) incurred or suffered by a Customer Indemnitee arising out of, related to, or in connection with any Claim by a third-party that the Punchh Platform or any of the Punchh Services and Documentation contemplated under this Agreement infringes or misappropriates such third-party's U.S. or Canadian patent claim, copyright, or trade secret ("Infringement Claim").
Punchh shall have no obligation with respect to any such Claim to the extent caused by (a) Customer's combination of software or hardware from third-parties not provided by Punchh (or not expressly approved in writing by Punchh) that are not intended for or reasonably contemplated to be used by the Customer or with the Customer's environment or application and that combination results in a Claim, or (b) Customer's use of a prior version of the Punchh Services or Documentation if the Claim would have been avoided had such prior version not been used by Customer, subject to and contingent upon, Punchh providing to Customer at least sixty (60) days prior written notice (of as much advance notice as is feasible given the nature of the Claim) of (1) the potential infringement Claim and (2) an updated, implementation-ready version of the Punchh Services or Documentation, at no additional cost to Customer.
Section 14.1 and subsection 14.1.i states the entire liability of Punchh, and Customer's sole and exclusive remedy, for any infringement involving the Punchh Platform, the Punchh Services or the Documentation.
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, Punchh is obligated to indemnify, defend, and hold harmless Dq Treat franchisees from actions, liabilities, damages, obligations, costs, and expenses (including reasonable attorneys' fees and costs) resulting from any third-party claim that the Punchh Platform or any of the Punchh Services and Documentation infringes or misappropriates a third-party's U.S. or Canadian patent claim, copyright, or trade secret. This is referred to as an "Infringement Claim."
However, Punchh has no obligation regarding any claim caused by (a) the franchisee's combination of software or hardware from third parties not provided or expressly approved by Punchh, if that combination results in a claim, or (b) the franchisee's use of a prior version of the Punchh Services or Documentation if the claim would have been avoided had the prior version not been used, provided Punchh gives at least 60 days prior written notice of the potential infringement claim and an updated version of the Punchh Services or Documentation at no additional cost to the franchisee.
The FDD specifies that Section 14.1 and subsection 14.1.i outline the entire liability of Punchh and the franchisee's sole and exclusive remedy for any infringement involving the Punchh Platform, the Punchh Services, or the Documentation. This means that Dq Treat franchisees should be aware of these limitations and ensure they use the Punchh platform and services as intended and keep their software up to date to maintain the protection offered by this indemnification.