Does the indemnification obligation of Amerispec Inspection Services survive the termination of the franchise agreement?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE AND THE GUARANTORS, BY SIGNING THIS AGREEMENT, INDEMNIFY AND AGREE TO DEFEND AND HOLD HARMLESS THE COMPANY AND ITS RELATED PARTIES AGAINST ALL LOSSES, CLAIMS, DAMAGES, PENALTIES, JUDGMENTS, LIABILITIES AND EXPENSES (INCLUDING, WITHOUT LIMITATION, ALL EXPENSES OF LITIGATION OR PREPARATION FOR LITIGATION WHETHER OR NOT THE COMPANY IS A PARTY TO THE LITIGATION) THAT THE COMPANY OR ANY OF ITS
RELATED PARTIES MAY PAY OR INCUR ARISING OUT OF OR RELATING TO THIS AGREEMENT OR TO FRANCHISEE'S OPERATION OF THE FRANCHISED BUSINESS EVEN IF CAUSED IN WHOLE OR IN PART BY THE NEGLIGENCE (WHETHER SOLE, JOINT OR CONCURRENT), OF THE COMPANY.
- 22.3 Indemnification by Company. The Company agrees to indemnify the Franchisee against, and to reimburse the Franchisee for, any obligation or liability for damages payable to persons other than the Franchisee or its owners that are attributable to agreements, representations or warranties of the Company, or solely caused by the negligent or willful action of the Company, and for costs (as hereinabove defined) reasonably incurred by the Franchisee in the defense of any claim brought against it as a result of the foregoing or in any such action in which it is named as a party. The Company shall have the right to participate in and to control any litigation or proceeding which might result in liability of or expense to the Franchisee subject to indemnification by the Company.
- 22.4 Survival of Obligations. The indemnity and assumption of liability obligations herein shall continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.
Source: Item 23 — Receipts (FDD pages 47–172)
What This Means (2025 FDD)
According to the 2025 Amerispec Inspection Services Franchise Disclosure Document, the franchisee's obligation to indemnify Amerispec Inspection Services survives the termination of the franchise agreement. Specifically, the franchisee agrees to indemnify, defend, and hold harmless Amerispec Inspection Services against all losses, claims, damages, penalties, judgments, liabilities, and expenses arising out of the agreement or the franchisee's operation of the franchised business. This obligation extends even if the losses are caused by the negligence of Amerispec Inspection Services.
In addition, Amerispec Inspection Services also agrees to indemnify the franchisee against obligations or liabilities for damages payable to others, attributable to the company's agreements, representations, warranties, or negligent/willful actions. This includes costs incurred by the franchisee in defending claims brought against them. Amerispec Inspection Services has the right to control any litigation that might result in liability for the franchisee, subject to indemnification by Amerispec Inspection Services.
Critically, the FDD states that these indemnification obligations for both the franchisee and Amerispec Inspection Services continue even after the termination or expiration of the franchise agreement. This means that even after the franchise relationship ends, both parties remain responsible for any liabilities or obligations covered by the indemnification clauses. This is a standard practice in franchising, as potential liabilities can arise long after the franchise agreement has ended.