Will The Standardx reimburse a franchisee's out-of-pocket costs for taking action to protect the Copyrighted Materials?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
You must notify us immediately of any apparent infringement or challenge to your use of any Copyrighted Materials or Confidential Information, or of any person's claim of any rights in any Copyrighted Materials or Confidential Information, and not communicate with any person other than us, our affiliates, and our and their attorneys, and your attorneys, regarding any infringement, challenge, or claim. We and our affiliates may take the action we and they deem appropriate (including no action) and control exclusively any litigation or administrative proceeding arising from any infringement, challenge, or claim or otherwise concerning any Copyrighted Materials or Confidential Information. You must sign any documents and take any other reasonable actions that, in the opinion of our and our affiliates' attorneys, are necessary or advisable to protect and maintain our and our affiliates' interests in any litigation or other proceeding or otherwise to protect and maintain our and our affiliates' interests in the Copyrighted Materials and Confidential Information. We will reimburse your reasonable out-of-pocket costs for taking any requested action.
We need not participate in your defense nor indemnify you for damages and expenses you incur if you are a party to any administrative or judicial proceeding involving any Copyrighted Materials or if the proceeding is resolved unfavorably to you. If it becomes advisable at any time in our sole judgment for you to modify or discontinue using any of the Copyrighted Materials and/or for you to use one or more additional or substitute copyrighted or copyrightable items, you must immediately comply with our directions.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 68–71)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, franchisees may be reimbursed for certain out-of-pocket costs related to protecting copyrighted materials. Specifically, if a franchisee is asked by The Standardx or its affiliates to take action, the franchisee will be reimbursed for reasonable out-of-pocket costs incurred while taking the requested action.
This means that if a franchisee is asked to sign documents or take other actions deemed necessary by The Standardx's attorneys to protect the company's interests in any litigation or proceeding related to copyrighted materials, The Standardx will cover the franchisee's reasonable expenses for taking those specific actions.
However, The Standardx need not participate in the franchisee's defense nor indemnify them for damages and expenses if the franchisee is a party to any administrative or judicial proceeding involving any Copyrighted Materials or if the proceeding is resolved unfavorably to the franchisee. This indicates that reimbursement is limited to actions specifically requested by The Standardx to protect its copyright interests, and does not extend to legal defense or losses incurred by the franchisee in separate proceedings. Franchisees should clarify what constitutes a 'reasonable out-of-pocket cost' with The Standardx.