Under what circumstances is an Aplus franchisee required to defend, indemnify, and hold harmless the Indemnified Parties?
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
reimburse Franchisor's costs. Franchisor's exercise of this control over the litigation shall not affect its rights to indemnification under this Section 21.3. Franchisee may not consent to the entry of judgment with respect to, or otherwise settle, an indemnified claim without the prior written consent of the applicable Indemnified Parties. Franchisor and the other Indemnified Parties do not have to seek recovery from third parties or otherwise attempt to mitigate losses to maintain a claim to indemnification under this Section 21.3. The provisions of this Section 21.3. shall survive the termination or expiration of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 68–302)
What This Means (2024 FDD)
According to Aplus's 2024 Franchise Disclosure Document, a franchisee is required to defend, indemnify, and hold harmless the Indemnified Parties under specific circumstances related to the operation of the franchised business. The Indemnified Parties include Aplus (the Franchisor) and its affiliates, subsidiaries, parents, and their respective officers, directors, managers, members, partners, shareholders, independent contractors, and employees.
The franchisee's obligation to defend, indemnify, and hold harmless the Indemnified Parties arises from various actions or omissions. These include any fines, suits, proceedings, claims, demands, liabilities, injuries, damages, expenses, obligations, or actions resulting from the franchisee's ownership, operation, or occupation of the Aplus store. This also extends to the franchisee's performance or breach of obligations under the Franchise Agreement, failure to meet Aplus's requirements and system standards, breach of any warranty or representation in the agreement, or from the acts or omissions of the franchisee, its employees, or agents, including advertising of the franchised business.
Aplus is required to provide the franchisee with written notice of any claim for indemnification, and failure to do so may only relieve the franchisee of liability if it causes actual material prejudice. Aplus retains the right to control all litigation and to defend or settle any claim against Aplus or other Indemnified Parties affecting Aplus's interests. Aplus may also retain its own counsel, with the franchisee responsible for advancing or reimbursing Aplus's costs. The franchisee cannot consent to the entry of judgment or settle an indemnified claim without the prior written consent of the Indemnified Parties. These indemnification provisions survive the termination or expiration of the Franchise Agreement.