What is the financial threshold for Spray Net's liability regarding indemnification of marks?
Spray_Net Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 7(M) of the Franchise Agreement is hereby amended by the addition of the following language:
M. Franchisor agrees to indemnify Franchisee from and against any losses, liabilities and damages for which Franchisee is held by a court of competent jurisdiction in any proceeding arising solely out of Franchisee's use of the mark "SPRAY-NET" and all other trademarks, service marks and associated marks and symbols utilized by Franchisee under this Agreement, provided such use is in accordance with and under the provisions of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 75–219)
What This Means (2025 FDD)
According to Spray Net's 2025 Franchise Disclosure Document, the franchisor agrees to indemnify the franchisee against losses, liabilities, and damages. This protection applies if the franchisee is held liable by a court with jurisdiction in a proceeding that arises solely from the franchisee's use of the "SPRAY-NET" mark and associated trademarks and symbols.
However, this indemnification is conditional. The franchisee's use of the marks must be in accordance with the provisions outlined in the Franchise Agreement. This means that if a franchisee uses the trademarks in a way not authorized by the agreement, they may not be covered by this indemnification.
This clause is included in the Minnesota Addendum to the Franchise Agreement, indicating that it may specifically apply to franchisees operating in Minnesota. Franchisees in other states should check for similar addenda or clauses in their agreements. The FDD does not specify a financial limit to Spray Net's liability under this indemnification, meaning the coverage could potentially extend to significant losses, liabilities, and damages, provided the conditions are met.