Does Ledgers have a duty to defend franchisees against claims arising from the use of its copyrighted items?

According to Ledgers' 2025 Franchise Disclosure Document, Ledgers has no duty to protect its copyrights or defend franchisees against claims arising from the use of its copyrighted items. This means that if a franchisee is sued for copyright infringement related to Ledgers' materials, Ledgers is not obligated to provide legal defense or cover any associated costs. The franchisee would be solely responsible for handling such claims.

This lack of obligation could pose a significant financial risk to prospective Ledgers franchisees. Copyright infringement claims can be expensive to defend, even if the franchisee is ultimately found not liable. Franchisees should consider this risk and potentially seek legal counsel to understand their options for protecting themselves, such as obtaining their own insurance coverage for intellectual property claims.

While Ledgers does not have a duty to defend, the FDD states that if a franchisee learns of any claim against them for alleged infringement, unfair competition, or similar claims about the Marks, the franchisee must promptly notify Ledgers. Ledgers retains the sole right to control any administrative proceedings or litigation involving a trademark licensed by them to the franchisee. This highlights the importance of franchisees promptly informing Ledgers of any potential intellectual property issues, even though Ledgers is not obligated to provide a defense.