Does the 7 Brew agreement require the owner to indemnify the manufacturer for claims arising from the shipping or transportation of the Unit?
7_Brew Franchise · 2025 FDDAnswer from 2025 FDD Document
(a) Owner agrees to defend, indemnify and hold harmless Manufacturer, its subsidiaries, parents and affiliates and their officers, directors, shareholders, agents, servants and employees from and against any and all third party claims, losses, liabilities, damages, expenses and costs, including reasonable attorney's fees and court costs (collectively "Claims" or individually a "Claim") arising out of (i) any grossly negligent act or omission, willful misconduct or fraud of Owner or its agents, (ii) Owner's breach of any of its representations, warranties or obligations contained in this Agreement, (iii) the alteration or modification of the Unit by the Owner or its employees, agents or representatives, (iv) the shipping or transportation of the Unit, (v) the installation of the Unit by Owner or its employees, agents or representatives, and (vi) the use of the Unit.
- (b) Manufacturer agrees to defend, indemnify, and hold harmless Owner, along with its officers, directors, agents, and employees from and against any and all claims resulting from or relating to any breach by Manufacturer of any non-fulfillment of any obligation that this Agreement requires Manufacturer to perform or otherwise arising out of Manufacturer's gross negligence or willful misconduct.
- (c) LIMITATION ON DAMAGES: IN NO EVENT SHALL THE PARTIES BE LIABLE TO EACH OTHER, OR TO THEIR RESPECTIVE OFFICERS, EMPLOYEES OR REPRESENTATIVES, OR TO ANY THIRD PARTY, FOR ANY INDIRECT, CONSEQUENTIAL, INCIDENTAL, SPECIAL, PUNITIVE OR EXEMPLARY DAMAGES OF OWNER, OWNER'S OFFICERS, EMPLOYEES, REPRESENTATIVES OR INSUREERS, OR OF ANY THIRD PARTY, OF WHATSOEVER NATURE (INCLUDING, BUT NOT LIMITED TO, LOST BUSINESS, LOST PROFITS, DAMAGE TO GOODWILL OR REPUTATION AND/OR DEGRADATION IN VALUE OF BRANDS, TRADEMARKS, TRADENAMES, SERVICES NAMES OR SERVICE MARKS, OR INJURY TO PERSONS) WHETHER ARISING OUT OF BREACH OF CONTRACT, WARRANTY, TORT (INCLUDING NEGLIGENCE, FAILURE TO WARN OR STRICT LIABILITY), CONTRIBUTION, INDEMNITY, SUBROGATION OR OTHERWISE.
Source: Item 23 — RECEIPTS (FDD pages 83–279)
What This Means (2025 FDD)
According to 7 Brew's 2025 Franchise Disclosure Document, the franchise agreement stipulates that the owner must indemnify the manufacturer for claims arising from the shipping or transportation of the Unit. Specifically, the owner agrees to defend, indemnify, and hold the manufacturer harmless from any third-party claims, losses, liabilities, damages, expenses, and costs, including attorney's fees and court costs, related to the shipping or transportation of the Unit. This obligation is outlined in Article 8 of the agreement, which addresses indemnification responsibilities between the owner and the manufacturer.
This requirement means that if any claims or issues arise during the shipping or transportation of the 7 Brew unit, the owner is responsible for covering the manufacturer's costs and legal liabilities. This could include damages to the unit during transit, accidents involving the transportation vehicle, or any other claims made by third parties related to the shipping process. The owner's responsibility extends to covering all associated expenses, including legal fees, which can potentially be substantial.
However, the manufacturer also has indemnification responsibilities. The manufacturer agrees to defend, indemnify, and hold harmless the owner from claims resulting from the manufacturer's breach of obligations or gross negligence. This creates a reciprocal arrangement where each party is responsible for their own actions and potential liabilities. It is important for prospective 7 Brew franchisees to understand the scope of their indemnification obligations and to ensure they have adequate insurance coverage to protect themselves against potential claims related to the shipping and transportation of the unit.
Furthermore, the agreement includes a limitation on damages, stating that neither party shall be liable for any indirect, consequential, incidental, special, punitive, or exemplary damages. This limitation applies to various types of damages, including lost business, lost profits, and damage to goodwill, regardless of whether the claim arises from breach of contract, warranty, tort, or other legal theories. This provision aims to limit the financial exposure of both parties in the event of a dispute or claim.