What is the scope of the acts or omissions that trigger an All Team USER's indemnification obligation?
All_Team Franchise · 2025 FDDAnswer from 2025 FDD Document
services is paid by USER in any way, directly or indirectly, expressly or by implication, shall be construed to be an employee of ATFC for any purpose, including, without limitation any tax or withholding requirements levied or fixed by any governmental law, rule or regulation is solely responsible for the day-to-day operations of the Business.
- 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.
- E. Assignment. This Processing Agreement is personal to USER and shall not be assignable or transferable by USER, in whole or in part, either voluntarily or by operation of law, except with the prior written consent of ATFC, which consent shall not unreasonably be withheld.
Source: Item 23 — RECEIPT (FDD pages 34–161)
What This Means (2025 FDD)
According to All Team's 2025 Franchise Disclosure Document, the USER (franchisee) has broad indemnification obligations to All Team Franchise Corporation (ATFC). The USER must indemnify, defend, and hold harmless ATFC and its related parties from any liabilities, obligations, losses, damages, penalties, claims, actions, costs, and expenses. This includes legal fees and expenses.
The indemnification extends to any damages or injuries suffered by ATFC's related parties. These liabilities can arise from the acts or omissions of the USER or its own employees, agents, officers, directors, parents, subsidiaries, affiliates, successors, and assigns. The obligation applies to matters relating to the Franchise Agreement or the transactions and relationships it contemplates.
Importantly, the USER's indemnification obligation applies regardless of whether All Team's related parties were negligent, even if their negligence contributed to the liability. This means an All Team franchisee could be responsible for covering All Team's losses even if All Team was partially at fault. This is a significant risk for franchisees, as they could face substantial financial burdens due to events outside of their direct control.
In a separate Funding Agreement, the USER must also indemnify, defend, and hold All Team harmless from any suits, claims, or demands resulting from the USER's acts or omissions, or those of its employees or agents, including those under or related to the Funding Agreement. The USER must reimburse All Team for all costs, damages, liabilities, losses, deficiencies, assessments, and expenses, including reasonable attorney's fees and court costs, that All Team may suffer due to the aforementioned acts or omissions.