Besides what is expressly provided in the Aplus franchise agreement or disclosure document, does the franchisee agree that Aplus's subsidiaries will have any liability for Aplus's obligations relating to the agreement?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall defend, indemnify and hold Franchisor and its affiliates, subsidiaries and parents, and their respective officers, directors, managers, members, partners, shareholders, independent contractors and employees (the "Indemnified Parties") harmless from all fines, suits, proceedings, claims, demands, liabilities, injuries, damages, expenses, obligations or actions of any kind (including costs and reasonable attorneys' fees) arising in whole or in part from Franchisee's ownership, operation, or occupation of the Franchised Business and APLUS Store, performance or breach of its obligations under this Agreement, failure to meet Franchisor requirements and System standards, breach of any warranty or representation in this Agreement or from the acts or omissions of Franchisee, its employees or agents, including its advertising of the Franchised Business, except as otherwise provided in this Agreement. Franchisor and any Indemnified Party shall promptly give Franchisee written notice of any claim for indemnification under this Section 21.3. Any failure to give the notice shall not relieve Franchisee of any liability under this Agreement except to the extent the failure or delay causes actual material prejudice. Franchisor shall have the right to control all litigation, and defend and/or settle any claim against Franchisor or other Indemnified Parties affecting Franchisor's interests, in any manner Franchisor deems appropriate. Franchisor may also retain its own counsel to represent Franchisor or other Indemnified Parties and Franchisee shall advance or
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
Based on the 2024 Aplus Franchise Disclosure Document, the franchise agreement outlines specific conditions regarding liability and indemnification. While the document does not explicitly state that Aplus's subsidiaries will have liability for Aplus's obligations relating to the agreement beyond what is expressly provided, it does include an indemnification clause. This clause stipulates that the franchisee is responsible for defending and holding Aplus, its affiliates, subsidiaries, and their respective personnel harmless from various claims and liabilities arising from the franchisee's business operations.
Specifically, the franchisee must indemnify Aplus and its related parties against liabilities, damages, and expenses resulting from the franchisee's operation of the Aplus store, any breach of the franchise agreement, or failure to meet Aplus's standards. This indemnification extends to the acts or omissions of the franchisee, their employees, or agents, including advertising activities. However, this obligation is contingent upon Aplus providing prompt written notice of any claim for indemnification. Failure to provide timely notice may relieve the franchisee of liability to the extent that the delay causes material prejudice.
Aplus retains the right to control any litigation and to defend or settle claims affecting its interests. Aplus may also hire its own counsel to represent itself or other indemnified parties, with the franchisee responsible for advancing or reimbursing the costs. This framework clarifies that while subsidiaries are not explicitly held liable for Aplus's obligations, the franchisee bears significant responsibility for liabilities arising from their own operations and must indemnify Aplus and its related entities against such claims, subject to certain notification and control conditions.