Under the Remax agreement, what is the scope of the Licensor's indemnification of the customer?
Remax Franchise · 2025 FDDAnswer from 2025 FDD Document
- 8.2 Indemnification by Licensor.
Licensor shall indemnify, hold harmless, and, at Customer's option, defend Customer and Authorized Users from and against any Losses that are asserted against, imposed on, or incurred or suffered by Customer or any Authorized User based on or arising out of Licensor's (or any affiliate of Licensor's) (i) negligence or more culpable acts or omissions; (ii) violation of law or infringement, violation or misappropriation of any intellectual property right or other right of any person, entity or estate; or (iii) breach of this Agreement, provided that Licensor may not settle any claim against Customer or any Authorized User unless such settlement completely and forever releases Customer and such Authorized Users from all liability with respect to such claim or unless Customer and, if applicable, the Authorized Users consent to such settlement.
- 8.3 IP Infringement.
In the case of a third-party claim against any Customer that alleges Licensor's infringement or violation of any Intellectual Property right related to the Software, or any component of the Software where Customer's, or any Authorized Users' access to and use of the Software is enjoined or disrupted as the result of that third-party claim, in addition to Licensor's defense and indemnification obligations, Licensor shall take one or more of the following actions at no additional cost to the Customer: (a) procure the right to continue using the Software without material interruption to the Customer's and Authorized Users' access to and use of the Software; (b) replace the infringing components of the Software with substantially similar, noninfringing systems, software, or products; or (c) modify the Software to make it noninfringing without materially impacting the functionality of the Software.
Source: Item 22 — Contracts (FDD pages 108–334)
What This Means (2025 FDD)
According to Remax's 2025 Franchise Disclosure Document, the Licensor (Remax) provides indemnification to the Customer and Authorized Users under specific circumstances. Remax will indemnify, hold harmless, and at the Customer's option, defend the Customer and Authorized Users against any losses asserted, imposed, or incurred due to: Remax's negligence or more culpable acts or omissions; violation of law or infringement, violation or misappropriation of any intellectual property right or other right; or breach of the agreement. However, Remax cannot settle any claim against the Customer or Authorized User unless the settlement completely releases them from all liability or unless they consent to the settlement.
In cases involving third-party claims alleging infringement of intellectual property rights related to the Software, or any component of the Software, where the Customer's or Authorized Users' access to and use of the Software is disrupted, Remax will take one or more actions at no additional cost to the Customer. These actions include procuring the right to continue using the Software without material interruption, replacing the infringing components with noninfringing systems, software, or products, or modifying the Software to make it noninfringing without materially impacting its functionality.
This indemnification clause is important for prospective Remax franchisees as it outlines the situations where Remax will protect the franchisee from losses and liabilities. It also specifies the actions Remax will take in the event of intellectual property infringement claims related to the software used in the franchise operations. Franchisees should carefully review these provisions to understand the extent of Remax's obligations and their rights in such situations.