Does the indemnification obligation of an Afuri Ramen Dumpling franchisee survive the termination of the Franchise Agreement?
Afuri_Ramen_Dumpling Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall indemnify, defend and hold harmless Franchisor and its affiliates against all losses, costs, proceedings, judgments, liabilities, expenses, court costs, and reasonable fees of attorneys and other professionals arising out of or related to: (1) any breach of the representations and warranties set out in this Addendum; (2) the operation of any Pre-Existing Business; or (3) any willful or negligent act or omission of Franchisee or Franchisee's owners, directors, officers, employees or agents (or those of any Pre-Existing Business). This indemnity includes but is not limited to any act or omission that contributes to any economic damage, bodily injury, sickness, disease or death. This indemnity shall survive termination of the Franchise Agreement. This indemnity is intended to be in addition to, and does not reduce the scope of, the indemnification provisions in the Franchise Agreement.
Source: Item 23 — Receipts (FDD pages 50–189)
What This Means (2024 FDD)
According to the 2024 Afuri Ramen Dumpling Franchise Disclosure Document, the franchisee's obligation to indemnify the franchisor does indeed survive the termination of the Franchise Agreement. This means that even after the franchise agreement ends, the franchisee remains responsible for covering losses, costs, and expenses incurred by Afuri Ramen Dumpling due to specific actions or omissions by the franchisee.
The indemnification clause covers situations such as breaches of representations and warranties made by the franchisee, the operation of any pre-existing businesses the franchisee may have, or any willful or negligent acts or omissions by the franchisee, their owners, directors, officers, employees, or agents. This includes actions that contribute to economic damage, bodily injury, sickness, disease, or death.
For a prospective Afuri Ramen Dumpling franchisee, this survival clause is a critical point to consider. It means that potential liabilities stemming from their operation of the franchise could extend beyond the term of the agreement itself. Franchisees should carefully review the scope of the indemnification provisions and understand the types of actions that could trigger this obligation. It is also important to maintain adequate insurance coverage to protect against potential claims even after the franchise agreement has ended.