Does the Alloy franchise agreement specify whether Alloy's negligence needs to be passive for a Franchise Claim to trigger 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 the 2025 Alloy Franchise Disclosure Document, Franchise Claims include those arising from death, personal injury, or property damage caused wholly or partly through Alloy's or its affiliates' active or passive negligence. This means that Alloy franchisees could be responsible for costs associated with claims against Alloy, regardless of whether Alloy's negligence was active or passive.
This broad definition of Franchise Claims and the franchisee's potential responsibility for Alloy's legal costs could have significant financial implications. If a claim is made against Alloy, they reserve the right to select their own legal counsel to represent their interests, with the franchisee bearing the cost. This could expose franchisees to substantial and potentially unpredictable legal expenses.
It is important for prospective Alloy franchisees to fully understand the scope of this indemnification clause and to consider obtaining legal advice to assess the potential risks and liabilities involved. Franchisees should also inquire about insurance coverage that may protect them against such claims and associated legal costs.