If a proceeding involving a Ledgers trademark is resolved unfavorably to the franchisee, is Ledgers required to indemnify them for damages?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
ed infringement, unfair competition, or similar claims about the Marks, you must promptly notify us. We are not required to take affirmative action when notified of these uses or claims.
We have the sole right to control any administrative proceedings or litigation involving a trademark licensed by us to you. The Franchise Agreement does not require us to participate in your defense or indemnify you for expenses or damages if you are a party to an administrative or judicial proceeding involving a trademark licensed by us to you or if the proceeding is resolved unfavorably to you.
If we discontinue or modify our Marks, you must adopt and use any new Marks as required by us. Any expenses you incur because of adopting and using these Marks are your responsibility.
We do not know of any superior prior rights or infringing uses that could materially affect your use of our Marks anywhere.
Source: Item 13 — TRADEMARKS (FDD pages 34–36)
What This Means (2025 FDD)
According to Ledgers's 2025 Franchise Disclosure Document, Ledgers is not required to defend or indemnify franchisees in legal proceedings involving trademarks. Specifically, the Franchise Agreement does not require Ledgers to participate in a franchisee's defense or cover expenses or damages if the franchisee is involved in an administrative or judicial proceeding concerning a trademark licensed to them, even if the outcome is unfavorable to the franchisee. This means that if a franchisee faces a lawsuit or administrative action related to the use of Ledgers's trademarks, they will be responsible for their own legal defense and any resulting costs or damages.
This lack of indemnification is a significant risk for prospective Ledgers franchisees. Trademark disputes can be costly and time-consuming, and the franchisee will bear the full financial burden of defending themselves, even if the dispute arises from their use of the trademark as directed by Ledgers. It is important to note that Ledgers retains the sole right to control any administrative proceedings or litigation involving their trademarks.
Franchisees are required to promptly notify Ledgers of any claims against them for alleged infringement, unfair competition, or similar claims about the Marks. However, Ledgers is not required to take any affirmative action upon receiving such notification. Furthermore, if Ledgers decides to discontinue or modify its Marks, franchisees are obligated to adopt and use any new Marks as required by Ledgers, and any expenses incurred due to this adoption are the franchisee's responsibility. This further emphasizes the franchisee's financial responsibility in trademark-related matters.
Prospective franchisees should carefully consider this lack of indemnification and factor in the potential costs of trademark disputes when evaluating the Ledgers franchise opportunity. It would be prudent to discuss this issue further with Ledgers and potentially seek legal advice to fully understand the risks and responsibilities associated with using the franchisor's trademarks.