Is Extreme Art Studio obligated for damages arising out of the franchisee's business operation?

According to the 2024 Extreme Art Studio Franchise Disclosure Document, Extreme Art Studio is generally not obligated for damages arising from the franchisee's business operations. However, there is an exception regarding trademark infringement proceedings.

Specifically, Extreme Art Studio agrees to reimburse the franchisee for all damages and expenses incurred in a trademark infringement proceeding if the proceeding disputes the franchisee's authorized use of any mark under the Franchise Agreement. This reimbursement is contingent upon the franchisee notifying Extreme Art Studio in a timely manner and complying with their directions in responding to the proceeding. Extreme Art Studio also has the option to defend and control the defense of any proceeding arising from the franchisee's use of any mark under the Franchise Agreement.

This means that if a third party sues an Extreme Art Studio franchisee for using a trademark that the franchisee was authorized to use under the franchise agreement, Extreme Art Studio will cover the franchisee's damages and expenses, provided the franchisee follows Extreme Art Studio's instructions. However, this obligation does not extend to other types of claims or liabilities that may arise from the franchisee's operation of the Extreme Art Studio business.