Does the definition of 'claims' for indemnification purposes include consequential damages for All County franchisees?
All_County Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee, and each of the Guarantors identified in Appendix C to the Franchise Agreement, agrees that it shall, at all times, indemnify, exculpate, defend and hold harmless, to the fullest extent permitted by law, All County, its successor, assigns, affiliates and the respective officers, directors, shareholders, agents, representatives, independent contractors, servants, and employees of each of them (the "Indemnified Parties") from all losses and expenses incurred in connection with any action, suit, proceeding, claim, demand, investigation, or inquiry (formal or informal), or any settlement thereof, which arises out of or is based upon the Reconciliation Assistance Program. For purposes of this indemnification, "claims" includes all obligations, damages (actual, consequential or otherwise) and costs incurred in the defense of any claim against any of the Indemnified Parties, including, without limitation, reasonable accountants', arbitrators', attorneys' and expert witness fees, costs of investigation and proof of facts, court costs, other expenses of litigation, arbitration or alternative dispute resolution and travel expenses. All County has the right to defend any such claim at your expense. This indemnity will continue in full force and effect subsequent to and notwithstanding the expiration or termination of the Franchise Agreement.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to All County's 2025 Franchise Disclosure Document, the definition of 'claims' for indemnification purposes does include consequential damages for franchisees participating in the Reconciliation Assistance Program. Specifically, franchisees agree to indemnify All County and its affiliates from all losses and expenses related to any claim arising from this program.
The FDD clarifies that 'claims' encompasses all obligations, damages (including actual, consequential, or other types), and costs incurred in defending against any claim. These costs extend to reasonable accountants', arbitrators', attorneys', and expert witness fees, as well as costs of investigation, proof of facts, court costs, other litigation expenses, and travel expenses. This means that if a claim arises related to the Reconciliation Assistance Program, the franchisee is responsible for covering not only direct damages but also any consequential damages that All County might incur.
This indemnification clause remains in effect even after the Franchise Agreement expires or is terminated. All County retains the right to defend any claim at the franchisee's expense. Therefore, franchisees should be aware of the potential financial burden they could face if claims arise from their participation in the Reconciliation Assistance Program, as they are responsible for a broad range of costs, including consequential damages.