Under what conditions will Fly Fitness indemnify and defend a franchisee against damages for intellectual property infringement?

According to Fly Fitness's 2024 Franchise Disclosure Document, Fly Fitness will indemnify, defend, and reimburse a franchisee for actual damages (including settlement amounts) if the franchisee is held liable in a legal proceeding. This protection applies only when the proceeding arises from the franchisee's use of Fly Fitness's intellectual property and the franchisee's conduct is in full compliance with the terms of the franchise agreement.

This means that Fly Fitness franchisees are protected from certain legal liabilities related to intellectual property infringement, but this protection is conditional. The franchisee must adhere strictly to the franchise agreement's terms regarding the use of Fly Fitness's trademarks, copyrights, and other intellectual property. Any deviation from these terms could void Fly Fitness's obligation to defend and indemnify the franchisee.

This type of provision is relatively standard in franchising. Franchisors typically offer some level of protection to franchisees against intellectual property claims, as the franchisee is using the franchisor's established brand and system. However, it is crucial for franchisees to understand the specific conditions and limitations of this protection, as failing to comply with the franchise agreement can have significant financial consequences.