What is the Aplus franchisee's responsibility if they fail to provide written notice of a claim for indemnification?

According to Aplus's 2024 Franchise Disclosure Document, if Aplus fails to provide prompt written notice of any claim for indemnification, this failure will not relieve the franchisee of liability under the Franchise Agreement. However, there is an exception: the franchisee is relieved of liability only to the extent that the failure or delay in providing notice causes actual material prejudice to the franchisee.

In practical terms, this means that if Aplus is sued and expects the franchisee to cover the costs (indemnification), Aplus must inform the franchisee in writing. If Aplus delays or fails to provide this notice, the franchisee may still be responsible for covering the costs, unless they can prove that the delay or lack of notice significantly harmed their ability to defend themselves.

For a prospective Aplus franchisee, this highlights the importance of understanding the indemnification clause and the need to promptly address any potential claims. While Aplus is required to provide notice, the franchisee should also proactively monitor their business operations and potential liabilities to ensure they are prepared to respond, even if formal notice is delayed. This also means that a franchisee should maintain thorough records and be prepared to demonstrate how a delay in notification from Aplus caused them actual harm in defending a claim.