Does Ledgers indemnify franchisees for expenses or damages if they are party to a trademark proceeding?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
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 participate in a franchisee's defense or indemnify them for expenses or damages if the franchisee is involved in an administrative or judicial proceeding regarding a trademark licensed by Ledgers, or if the proceeding is resolved unfavorably to the franchisee. This means that if a franchisee is sued for trademark infringement related to the use of Ledgers's trademarks, the franchisee will be responsible for their own legal defense and any resulting damages.
This lack of indemnification is a significant risk for prospective Ledgers franchisees. Trademark litigation can be expensive, and an unfavorable outcome could result in substantial financial losses. While Ledgers has the sole right to control any administrative proceedings or litigation involving their trademarks, they are not obligated to provide financial support to franchisees facing such claims.
It is important for prospective franchisees to understand this risk and to consider purchasing appropriate insurance coverage to protect themselves against potential trademark infringement claims. Additionally, franchisees should conduct their own due diligence to ensure that their use of Ledgers's trademarks does not infringe on the rights of others. Franchisees should consult with an attorney to fully understand their rights and obligations under the Franchise Agreement and to assess the potential risks associated with using Ledgers's trademarks.
In the event that Ledgers discontinues or modifies its Marks, franchisees are responsible for any expenses incurred as a result of adopting and using these new Marks. This further emphasizes the franchisee's financial responsibility related to trademark usage.