In the Stretch Zone franchise agreement, what is the franchisee's responsibility for defense and response costs related to claims?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
- (c) The Franchisor will protect the Franchisee's rights to use the trademarks, service marks, trade names, logotypes or other commercial symbols or indemnify the Franchisee from any loss, costs or expenses arising out of any claim, suit or demand regarding the use of the name.
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)
Based on the 2025 Stretch Zone Franchise Disclosure Document, the franchisor, Stretch Zone Franchising LLC, will protect the franchisee's rights to use their trademarks, service marks, trade names, logotypes, or other commercial symbols. Additionally, Stretch Zone will indemnify the franchisee from any losses, costs, or expenses arising from any claim, suit, or demand regarding the use of the name. This means that if a third party sues a Stretch Zone franchisee for trademark infringement, Stretch Zone will cover the franchisee's losses, costs, and expenses. This protection is particularly important for franchisees as it shields them from potentially significant legal costs associated with defending against intellectual property claims. This protection applies specifically to the use of Stretch Zone's trademarks and names, not to other types of claims or lawsuits. Franchisees should ensure they understand the scope of this indemnity and consider additional insurance or legal advice to cover other potential liabilities. This type of protection is a significant benefit for franchisees, as it reduces their financial risk related to intellectual property disputes. Franchisees in Minnesota have additional protections under state law.