What costs must an All Team franchisee reimburse ATFC for under the indemnification clause?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
USER shall indemnify, defend and hold ATFC harmless from (i) any and all manner of suits, claims or demands resulting from or arising out of USER's acts or omissions or those of its employees or agents, including those under or related to this Funding Agreement or the transactions or relationships contemplated hereby, and (ii) any breach or default by USER under this Funding Agreement.
USER shall reimburse ATFC for any and all costs, damages, liabilities, losses, deficiencies, assessments and expenses, including reasonable attorney's fees and court costs that ATFC may suffer or incur or to which ATFC may be subject by reason of any of the foregoing.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the franchisee (referred to as USER) is responsible for indemnifying, defending, and holding ATFC harmless from various liabilities, obligations, losses, and expenses. This includes any costs, damages, liabilities, losses, deficiencies, assessments, and expenses, including reasonable attorney's fees and court costs, that ATFC may incur due to the franchisee's actions or omissions, or those of their employees or agents. This obligation extends to any suits, claims, or demands arising out of the Funding Agreement or related transactions.
Specifically, the franchisee must cover any liabilities, obligations, losses, damages, penalties, claims, actions, costs, and expenses (including legal fees) that ATFC incurs due to the franchisee's acts or omissions. This applies regardless of whether ATFC's negligence contributed to the liability. The franchisee's indemnification extends to ATFC and its employees, agents, officers, directors, parents, subsidiaries, affiliates, successors, and assigns.
In the context of dispute resolution, if the All Team franchisee fails to comply with the dispute resolution provisions, they must reimburse ATFC for all expenses incurred in rectifying the breach. This includes attorney's fees and costs related to dismissing or responding to improperly filed claims. Additionally, the franchisee must pay ATFC a Dispute Resolution Fee of $50,000, which is considered liquidated damages and not a penalty. This fee is intended to compensate ATFC for damages resulting from the breach of dispute resolution provisions, as calculating the precise extent of these damages is deemed difficult.