Does the All Team Processing Agreement specify any limitations on the All Team USER's liability for indemnification?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
- D. Indemnification. Under no circumstances shall ATFC be liable for any act, omission, debt, or other obligation of USER.
USER will indemnify, defend and save harmless ATFC and its employees, agents, officers, directors, parents, subsidiaries, affiliates, successors and assigns ("Indemnitees") from and against any and all liabilities, obligations, losses, damages, penalties, claims, actions, costs and expenses (including without limitation legal fees and expenses) of any kind and nature whatsoever, including without limitation damages or injuries suffered by Indemnitees, which may be imposed on, incurred by or asserted against the Indemnitees in any way arising out of the acts or omissions of USER or its employees, agents, officers, directors, parents, subsidiaries, affiliates, successors and assigns ("Indemnitors") pursuant to or relating to this Agreement or the transactions or relationships contemplated hereby or a breach or default by USER under this Agreement regardless of whether the Indemnities were negligent or that said negligence was a contributing factor in the liability.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the Processing Agreement does not specify any explicit monetary limitations on the USER's (franchisee's) liability for indemnification. The agreement stipulates that the USER will indemnify, defend, and hold harmless All Team Franchise Corporation (ATFC) and its related parties from any liabilities, obligations, losses, damages, penalties, claims, actions, costs, and expenses arising from the USER's acts or omissions. This indemnification extends to legal fees and expenses and applies regardless of whether the Indemnitees (ATFC) were negligent.
This means that as an All Team franchisee, you could be financially responsible for a wide range of costs and damages incurred by All Team due to your actions or the actions of your employees. This could include legal costs, settlements, and other expenses resulting from lawsuits or claims. The absence of a specific limit on this liability means that the potential financial exposure for a franchisee could be significant, depending on the nature and extent of the claim.
While the Processing Agreement outlines the franchisee's broad indemnification obligations, it's important to note that the Funding Agreement also contains an indemnification clause. This clause states that the USER shall indemnify, defend, and hold ATFC harmless from any suits, claims, or demands resulting from the USER's acts or omissions, including those related to the Funding Agreement itself. This further emphasizes the franchisee's responsibility to cover costs and damages incurred by All Team due to their conduct. Prospective franchisees should carefully consider the implications of these indemnification clauses and seek legal counsel to fully understand their potential liabilities.