What specific entities are included in the definition of 'Indemnified Parties' that Anago's Subfranchisor must defend, protect, indemnify, and hold harmless?
Anago Franchise · 2025 FDDAnswer from 2025 FDD Document
Subfranchisor will defend fully, protect, indemnify and hold harmless Franchisor, its Affiliates and their respective officers, directors, agents, employees, successors and assigns (the "Indemnified Parties") from and against all claims, requests for relief, judgments, liabilities of any kind or nature, payments of money, including, without limitation, demands, cause of action, costs, expenses (including reasonable attorneys' fees, accounting expenses, costs and expenses incurred in defense of Franchisor, even if incident to appellate, post-judgment or bankruptcy proceedings), damages (including incidental, actual, consequential and punitive damages), fines and settlement amounts, of every kind and description, incurred by Indemnified Parties in connection with, arising out of, or resulting from (a) Subfranchisor's operation of the Subfranchise Business, (b) the nonperformance of, or other acts or omissions relating to, the Unit Franchise Agreements of Subfranchisor, (c) Subfranchisor's negligence or willful misconduct, (d) Subfranchisor's violation of any law or regulation, (e) Subfranchisor's breach of any covenant, representation or warranty in this Agreement, (f) any claim that we or our affiliates are the employer or joint employer of you, your Subfranchisees or your Subfranchisees' employees, or (g) because of any act or omission of Subfranchisor or any person associated with, employed by, or affiliated with Subfranchisor, including any action that may be made or asserted by a Unit Franchisee, a prospective Unit Franchisee or any third party.
Subfranchisor shall promptly give written notice to Franchisor of any action, suit, proceeding, claim, demand, inquiry or investigation related to the foregoing.
Franchisor shall have the right, through counsel of its own choice at Subfranchisor's expense, to control the defense, respond to or settle any such action, and such undertaking by Franchisor shall not, in any manner or form, diminish Subfranchisor's obligations to Franchisor hereunder.
Source: Item 23 — RECEIPTS (FDD pages 62–298)
What This Means (2025 FDD)
According to Anago's 2025 Franchise Disclosure Document, the Subfranchisor is obligated to defend, protect, indemnify, and hold harmless specific entities, collectively known as the "Indemnified Parties". These Indemnified Parties include Anago (the Franchisor), its Affiliates, and their respective officers, directors, agents, employees, successors, and assigns. This obligation arises from various claims, requests, judgments, and liabilities connected to the Subfranchisor's business operations.
This indemnification clause means that the Subfranchisor is financially responsible for any losses, damages, or expenses incurred by the Indemnified Parties due to the Subfranchisor's actions or omissions. This includes legal costs, settlements, and any other financial liabilities resulting from the Subfranchisor's operation of the Subfranchise Business, nonperformance of Unit Franchise Agreements, negligence, violation of laws, or breach of the Subfranchise Agreement. It extends to claims asserting that Anago or its affiliates are the employer or joint employer of the Subfranchisor, their Subfranchisees, or their employees.
The Subfranchisor must promptly notify Anago of any related legal actions or claims. Anago has the right to control the defense or settlement of any such action, at the Subfranchisor's expense, without diminishing the Subfranchisor's indemnification obligations. This arrangement protects Anago and its related parties from potential liabilities arising from the Subfranchisor's activities, ensuring that the Subfranchisor bears the financial burden of any misconduct or negligence in their business operations.
This type of clause is standard in franchising to protect the franchisor from liabilities caused by the franchisee's actions. Prospective Anago Subfranchisors should carefully consider the potential financial implications of this indemnification clause and ensure they have adequate insurance and risk management strategies in place.