If the Floyds 99 franchisee is named in a lawsuit regarding trademark infringement, who is responsible for the franchisee's legal fees?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchisor shall indemnify and hold the Franchisee harmless from, and reimburse the Franchisee for, any loss, liability, claim or damages (collectively, the "Claims"), and all reasonable costs, expenses and attorneys' fees incurred defending any Claims brought against the Franchisee, or in any action in which the Franchisee is named as a party, which arises out of or is related to the Franchisee's authorized use of any Mark or copyrighted work of the Franchisor, which use is in compliance with the terms of this Agreement.
The Franchisee shall timely notify the Franchisor of any Claims for which it is seeking indemnity hereunder.
The Franchisor, at its option, shall be entitled to control the defense of any action or proceeding involving any Claims.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, the franchisor will cover the franchisee's legal fees in the event of a lawsuit related to the franchisee's authorized use of Floyds 99's trademarks or copyrighted material, provided the franchisee is in compliance with the franchise agreement. Specifically, Floyds 99 will indemnify the franchisee, covering losses, liabilities, claims, damages, costs, expenses, and attorney's fees. The franchisee is obligated to promptly inform Floyds 99 of any such claims.
Floyds 99 retains the right to manage the defense of any legal action or proceeding associated with these claims. This means that while the franchisee is protected financially, Floyds 99 has the authority to control the legal strategy and representation in the case.
This arrangement is beneficial for the franchisee as it alleviates the financial burden of defending against trademark infringement claims that arise from using Floyds 99's approved branding. However, it's crucial for the franchisee to adhere to the franchise agreement and use the trademarks and copyrighted works only as authorized to ensure this protection remains in effect. Additionally, the franchisee must relinquish control of the legal defense to Floyds 99.