Does the Alloy franchise agreement specify that the franchisee's indemnification obligations do not cover claims solely related to Alloy's willful misconduct?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Indemnification. You waive all claims against us for damages to property or injuries to persons arising out of the operation of your Business. You must fully protect, indemnify and hold us and our owners, directors, officers, insurers, successors and assigns and our affiliates harmless from and against any and all claims, demands, damages and liabilities of any nature whatsoever arising in any manner, directly or indirectly, out of or in connection with or incidental to the operation of your Business (regardless of cause or any concurrent or contributing fault or negligence of us or our affiliates) or any breach by you or your failure to comply with the terms and conditions of this Agreement, although your indemnification obligations under this subparagraph 10.B do not cover claims solely related to our willful misconduct. We also reserve the right to select our own legal counsel to represent our interests, and you must reimburse us for all our costs and all attorneys' fees immediately upon our request as they are incurred.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, the franchise agreement does include a provision that limits the franchisee's indemnification obligations. Specifically, the agreement states that the franchisee's duty to protect, indemnify, and hold Alloy harmless does not extend to claims solely related to Alloy's own willful misconduct. This means that while franchisees are generally responsible for covering claims and liabilities arising from their business operations, they are not required to cover Alloy's intentional wrongful acts. This protection applies to Alloy, its owners, directors, officers, insurers, successors, assigns, and affiliates.
This provision is beneficial for prospective Alloy franchisees as it provides a degree of protection against being held liable for Alloy's own intentional misdeeds. Without this clause, franchisees could potentially be responsible for covering claims even when Alloy is directly at fault through willful misconduct. This limitation on liability can make the franchise opportunity more attractive and reduce the potential financial risks for franchisees.
However, it is important to note that the franchisee is still responsible for indemnifying Alloy against claims arising from the operation of their business, regardless of cause or any concurrent or contributing fault or negligence of Alloy or its affiliates. The exception only applies to claims solely related to Alloy's willful misconduct, meaning that if the franchisee's actions contribute to the claim, they may still be responsible for indemnification. Franchisees should carefully review the definition of "willful misconduct" in the franchise agreement and consult with legal counsel to fully understand the scope of this provision and their potential liabilities.