What is Alloy's definition of 'Franchise Claims' in the context of indemnification?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchise Claims include, but are not limited to, those arising from any death, personal injury or property damage (whether caused wholly or in part through our or our affiliates' active or passive negligence), latent or other defects in any Facility, or your employment practices.
If a Franchise Claim is made against us or our affiliates, we reserve the right in our sole judgment to select our own legal counsel to represent our interests, at your cost.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, Franchise Claims include claims arising from specific incidents. These include incidents resulting in death, personal injury, or property damage, regardless of whether Alloy or its affiliates were actively or passively negligent. The definition also extends to claims related to latent or other defects in any facility, as well as those arising from the franchisee's employment practices.
This definition is important for prospective Alloy franchisees because it outlines the types of claims for which they may be responsible. If a claim is made against Alloy or its affiliates, Alloy reserves the right to select its own legal counsel to represent its interests, and the franchisee will bear the cost of this legal representation. This could potentially expose franchisees to significant legal expenses depending on the nature and extent of the claim.
It is crucial for potential Alloy franchisees to fully understand the scope of these Franchise Claims and to assess their potential financial exposure. Franchisees should also consider obtaining adequate insurance coverage to protect themselves against these types of claims. Understanding these obligations is a key part of evaluating the risks and benefits of investing in an Alloy franchise.