What actions must a Stretch Zone franchisee take to receive indemnification from Stretch Zone regarding intellectual property claims?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 5.5 INDEMNIFICATION BY US.
We indemnify you against and will reimburse you for all damages and costs (including reasonable attorneys' fees and costs) for which you are held liable in any proceeding based on your use of any of the Intellectual Property in accordance with the Franchise Agreement, provided you: (a) have timely notified us of the claim or proceeding; (b) have otherwise complied with the Franchise Agreement; (c) allow us sole control of the defense and settlement of the action; and (d) cooperate fully with our counsel in the defense of the action.
Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)
What This Means (2025 FDD)
According to Stretch Zone's 2025 Franchise Disclosure Document, Stretch Zone will indemnify a franchisee against damages and costs, including attorney's fees, if the franchisee is held liable in a proceeding based on their use of Stretch Zone's intellectual property, provided the franchisee meets certain conditions.
To receive indemnification, the Stretch Zone franchisee must: (a) provide timely notification of the claim or proceeding to Stretch Zone, (b) comply with all other terms of the Franchise Agreement, (c) allow Stretch Zone sole control over the defense and settlement of the action, and (d) fully cooperate with Stretch Zone's counsel in the defense of the action.
These conditions are fairly typical in franchising. Franchisors want to control the defense of their intellectual property to ensure a consistent legal strategy and protect the brand. Franchisees should be aware that failure to meet any of these conditions could void Stretch Zone's indemnification obligation, leaving the franchisee responsible for potentially significant legal costs.