Under what circumstances will an Aplus franchisee be required to defend, indemnify, and hold harmless the Indemnified Parties, according to Section 13.19?
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)
According to Aplus's 2024 Franchise Disclosure Document, Section 21.3 outlines the circumstances under which a franchisee must defend, indemnify, and hold harmless the Indemnified Parties. These circumstances primarily revolve around the franchisee's actions and operations of the Aplus store. The Indemnified Parties include Aplus (the Franchisor), its affiliates, subsidiaries, parents, and their respective officers, directors, managers, members, partners, shareholders, independent contractors, and employees.
Aplus franchisees are obligated to protect the Indemnified Parties from any liabilities, damages, and expenses that arise from the franchisee's operation of the Aplus store. This includes any fines, suits, proceedings, claims, or actions related to the franchisee's ownership, operation, or occupation of the franchised business. It also extends to the franchisee's performance or breach of obligations under the franchise agreement, failure to meet Aplus's requirements and system standards, or any breach of warranty or representation made in the agreement. The franchisee is also responsible for the acts or omissions of their employees or agents, including advertising activities.
Aplus retains control over any litigation related to indemnification claims and can defend or settle claims as it deems appropriate. While Aplus must provide written notice of any indemnification claim, failure to do so only relieves the franchisee of liability if the delay causes actual material prejudice. The franchisee cannot settle an indemnified claim without the prior written consent of the Indemnified Parties. These indemnification obligations survive the termination or expiration of the franchise agreement, meaning the franchisee's responsibility extends even after the agreement is no longer in effect.