Is Epcon Communities required to participate in a franchisee's defense or indemnify them in copyright litigation?

According to Epcon Communities' 2025 Franchise Disclosure Document, Epcon Communities is not required to participate in a franchisee's defense or indemnify them for expenses or damages if the franchisee is involved in an administrative or judicial proceeding concerning copyrights, or if a copyright proceeding is resolved unfavorably to the franchisee. However, if a third party institutes litigation against Epcon Communities or the franchisee involving copyright registrations, Epcon Communities has the sole discretion to undertake the defense, prosecution, or settlement of the litigation. If Epcon Communities chooses to do so, the franchisee is required to sign documents and provide assistance that Epcon Communities deems reasonably necessary for the defense, prosecution, or settlement.

This means that if a franchisee faces a copyright infringement claim related to the use of Epcon Communities' copyrighted materials, Epcon Communities is not obligated to provide legal assistance or cover the franchisee's expenses. The franchisee would be responsible for their own defense. However, Epcon Communities retains the right to control the litigation if it chooses, and the franchisee must cooperate in that case.

This arrangement is not uncommon in franchising. Franchisors often retain control over intellectual property defense but may not always cover a franchisee's individual legal costs. Prospective franchisees should carefully consider this allocation of risk and may want to seek legal counsel to understand their obligations and potential liabilities related to copyright issues when operating an Epcon Communities franchise.