Is Pearce Bespoke required to indemnify franchisees against infringement claims?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
Pearce Bespoke is not required to protect you against infringement or unfair competition claims arising out of your use of the Marks, or to participate in your defense or indemnify you. Pearce Bespoke reserves the right to control any trademark litigation and will take the action Pearce Bespoke believes appropriate if a third party infringes Pearce Bespoke's Marks. You must notify Pearce Bespoke promptly if you become aware of any infringement or unauthorized use of the Marks and cooperate with any action that Pearce Bespoke takes. Pearce Bespoke will pay the cost and expense of all litigation Pearce Bespoke incurs, including attorneys' fees, specifically related to the Marks. However, Pearce Bespoke is not required to take affirmative action when notified of these uses or claims. If any party claims that its rights to use any of the Marks are superior and Pearce Bespoke confirms that claim, you must, at your expense, immediately make the changes and use the substitutions to the Marks as Pearce Bespoke requires.
Source: Item 13 — TRADEMARKS (FDD page 29)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, Pearce Bespoke is not required to protect franchisees against infringement or unfair competition claims that arise from the franchisee's use of Pearce Bespoke's trademarks. This means that if a third party claims that a Pearce Bespoke franchisee is infringing on their trademark by using the Pearce Bespoke marks, Pearce Bespoke is not obligated to defend the franchisee or cover any resulting costs.
Pearce Bespoke does retain the right to control any trademark litigation related to its marks and will take action it deems appropriate if a third party infringes on Pearce Bespoke's marks. Franchisees are required to notify Pearce Bespoke promptly if they become aware of any infringement or unauthorized use of the marks and must cooperate with any action Pearce Bespoke decides to take. Pearce Bespoke will cover the costs and expenses of litigation, including attorney's fees, specifically related to its marks. However, Pearce Bespoke is not required to take any action, even if notified of such claims.
Furthermore, if a party claims superior rights to the marks and Pearce Bespoke confirms that claim, franchisees must, at their own expense, immediately make any changes or substitutions to the marks as required by Pearce Bespoke. This could involve rebranding or altering marketing materials, which would be an additional cost borne by the franchisee. This lack of indemnification is not uncommon in franchising, as many franchisors pass the responsibility for trademark infringement defense onto their franchisees.