Are there any exceptions to the franchisee's obligation to indemnify Amerispec Inspection Services?
Amerispec_Inspection_Services Franchise · 2025 FDDAnswer from 2025 FDD Document
22.2 Indemnification by Franchisee. Neither the Company nor the Franchisee shall be obligated by any agreement, representation or warranty (except warranties specifically authorized by the Company, if any) made by the other, nor shall the Company be obligated for damages to any person or property directly or indirectly arising out of the operation of the Franchised Business or the Franchisee's business conducted hereunder, breach of contract, or caused by the Franchisee's negligence, willful action or failure to act. The Franchisee agrees to indemnify the Company in any action, suit, proceeding, demand, investigation or inquiry (formal or informal) wherein the liability of the Company is alleged or in which the Company is named as a party as a result of activities by the Franchisee. In the event that such an action or claim is made against the Company, the Franchisee shall indemnify and hold harmless the Company from all costs reasonably incurred by the Company in the defense of any such claim brought against it, or in any such action in which it is named as a party, including without limitation, reasonable attorneys' fees, costs of investigation or proof of facts, court costs, other litigation expenses and travel and living expenses, and from all amounts paid or incurred by the Company arising out of such claim or action. The Company shall have the right to defend any such claim against it. Such an undertaking by the Company shall, in no manner or form, diminish the Franchisee's obligation to indemnify the Company and to hold it harmless. The Company shall not be required or obligated to seek recovery from third parties or otherwise mitigate its losses in order to maintain a claim against the Franchisee. If a decision rendered in an action or suit covered by this Paragraph 22 is against the Franchisee or the Company, and the Company desires to appeal the decision, the Franchisee may notify the Company within 10 days of the date of the decision of its intent to abide by the decision, then, in such event, the Franchisee shall pay the Company the amount required of it under this Paragraph 22 and all future costs related to the appeal and/or settlement of the claim shall be the responsibility of the Company.
Source: Item 23 — Receipts (FDD pages 47–172)
What This Means (2025 FDD)
According to Amerispec Inspection Services's 2025 Franchise Disclosure Document, the franchisee is generally obligated to indemnify Amerispec Inspection Services against liabilities arising from the franchisee's business operations. However, there is an exception if the franchisee notifies Amerispec Inspection Services of their intent to abide by an adverse decision in a legal action.
Specifically, if a decision in a lawsuit is rendered against either the franchisee or Amerispec Inspection Services, the franchisee has 10 days to notify Amerispec Inspection Services that they will abide by the decision. If the franchisee provides this notification and pays the amount required under Paragraph 22 (which outlines the indemnification obligations), then Amerispec Inspection Services becomes responsible for all future costs related to appealing or settling the claim.
This exception provides a limited form of protection for the franchisee. By agreeing to accept the initial court decision, the franchisee caps their liability at the amount determined in that decision and shifts the responsibility for further legal costs to Amerispec Inspection Services. This could be beneficial if the franchisee believes that an appeal is unlikely to succeed or that the potential costs of an appeal outweigh the potential benefits. However, the franchisee must be prepared to immediately pay the amount required under the indemnification clause to take advantage of this exception.