Under what circumstances must an Alloy franchisee indemnify Alloy and its affiliates?
Alloy Franchise · 2025 FDDAnswer from 2025 FDD Document
mages and liabilities, however caused, arising directly or indirectly from, as a result of, or in connection with, the development, use and operation of your Facilities, as well as the costs, including attorneys' fees, of defending against them ("Franchise Claims"). 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.
- B. Should one or more clauses of this Agreement be held void or unenforceable for any reason by any court of competent jurisdiction, such clause or clauses will be deemed to be separable in such jurisdiction and the remainder of this Agreement is valid and in full force and effect and the terms of this Agreement must be equitably adjusted so as to compensate the appropriate party for any consideration lost because of the elimination of such clause or clauses.
- C. No waiver by us of any breach by you, nor any delay or failure by us to enforce any provision of this Agreement, may be deemed to be a waiver of any other or subsequent breach or be deemed an estoppel to enforce our rights with respect to that or any other or subsequent breach. This Agreement may not be waived, altered or rescinded, in whole or in part, except by a writing signed by you and us.
- D.
Source: Item 23 — RECEIPTS (FDD pages 69–245)
What This Means (2025 FDD)
According to Alloy's 2025 Franchise Disclosure Document, if a Franchise 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. Franchise Claims include claims arising from death, personal injury, property damage (whether caused by Alloy's or its affiliates' negligence), defects in any Facility, or the franchisee's employment practices.
Additionally, if a person or entity improperly uses or infringes the Trademarks, or challenges the franchisee's or Alloy's use or ownership of the Trademarks, the franchisee must promptly notify Alloy. Alloy or its affiliate has the sole right to direct and control any administrative proceeding or litigation involving the Trademarks, including any settlement. Alloy or its affiliate may defend the franchisee against any third-party claim arising out of the franchisee's use of the Trademarks. If Alloy or its affiliate determines that the franchisee has used the Trademarks in accordance with the Franchise Agreement, the cost of the defense, including the cost of any judgment or settlement, will be borne by Alloy or its affiliate. However, if Alloy or its affiliate determines that the franchisee has not used the Trademarks in accordance with the Franchise Agreement, the franchisee will bear the cost of the defense, including the cost of any judgment or settlement.
This means that as an Alloy franchisee, you could be responsible for covering Alloy's legal costs in situations like a customer injury at your facility, a dispute over your hiring practices, or any claims related to misuse of the Alloy trademarks if you haven't followed the agreement. This is a significant potential financial risk, as legal fees and settlements can be substantial. Franchisees should ensure they understand and adhere to all brand standards and legal requirements to minimize the risk of such claims.