What are the requirements for a Stretch Zone franchisee to receive indemnification from Stretch Zone regarding copyright infringement claims?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
If there is any claim of copyright infringement, unfair competition or other challenge to your right to use of any Copyright, or if you become aware of any use of, or claims to, any Copyright by persons other than us or our Franchisees, you will promptly (within 7 days) notify us in writing. You will not communicate with anyone except our counsel and us on any infringement, challenge or claim except under judicial process. We have sole discretion as to whether we take any action on any infringement, challenge or claim. We have the sole right to control any litigation or other proceeding arising out of any infringement of, challenge to, or claim to any Copyright. You must sign all documents, render all assistance, and do all acts that our attorneys deem necessary or advisable in order to protect and maintain our interest in any litigation or proceeding involving the Copyright or otherwise to protect and maintain our interests in the Copyright. 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 Copyright 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 14 — ITEM -14 PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 60–62)
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 reasonable attorney's fees, if the franchisee is held liable in a proceeding based on their use of any copyright in accordance with the Franchise Agreement. However, this indemnification is contingent upon meeting specific conditions.
First, the franchisee must promptly notify Stretch Zone of any copyright infringement claim or proceeding. The notification must be within 7 days and in writing. Second, the franchisee must comply with all other terms of the Franchise Agreement. Third, the franchisee must allow Stretch Zone sole control over the defense and settlement of any action related to the copyright claim. Finally, the franchisee must fully cooperate with Stretch Zone's counsel in the defense of the action, including signing documents and providing assistance as deemed necessary by the attorneys.
These conditions are fairly standard in franchise agreements. Franchisors typically want to control the defense of intellectual property claims to ensure a consistent and strategic approach. By retaining control and requiring cooperation, Stretch Zone aims to protect its brand and system while also providing support to its franchisees facing such claims. Franchisees should carefully review the Franchise Agreement to fully understand their obligations and ensure they can meet these conditions to be eligible for indemnification.