Does the 1-800-GOT-JUNK? Guarantor's obligation include costs for the Franchisor's counsel?
1_800_Got_Junk Franchise · 2025 FDDAnswer from 2025 FDD Document
Section 22 of the Franchise Agreement states that you will indemnify and hold us, and our subsidiaries, affiliates, shareholders, directors, officers, employees, agents, assignees and other franchisees; harmless against all liabilities, obligations, and consequential damages, taxes, costs, losses and actual legal expenses; any claim, litigation or other action or proceeding arising out of the operation of the franchised business.
However, you are not required to indemnify us for claims resulting solely from our breach of this Agreement or other wrongs we commit.
This provision may not be enforceable in Kansas unless separately negotiated and reasonable. By signing this Addendum, you hereby agree that you separately considered and had an opportunity to consult legal counsel concerning this indemnity, and that you consider it reasonable.
Source: Item 22 — Contracts (FDD page 24)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Section 22 of the Franchise Agreement for 1-800-GOT-JUNK? states that franchisees will indemnify and hold harmless 1-800-GOT-JUNK? and its related parties from all liabilities, obligations, consequential damages, taxes, costs, losses, and actual legal expenses arising from any claim, litigation, or other action related to the operation of the franchised business. This means a franchisee could be responsible for covering 1-800-GOT-JUNK?'s legal expenses under certain circumstances.
However, the franchisee is not required to indemnify 1-800-GOT-JUNK? for claims resulting solely from 1-800-GOT-JUNK?'s breach of the agreement or other wrongs they commit. This provides some protection to the franchisee, ensuring they are not liable for 1-800-GOT-JUNK?'s own misconduct.
Furthermore, the addendum notes that this indemnification provision may not be enforceable in Kansas unless it is separately negotiated and deemed reasonable. The franchisee must acknowledge that they have had the opportunity to consult legal counsel regarding this indemnity and that they consider it reasonable, especially if operating in Kansas. This highlights the importance of seeking legal advice to fully understand the implications of the indemnification clause and its potential impact on the franchisee's financial obligations.