Under what circumstances is an Aplus franchisee required to indemnify and reimburse Sunoco for costs, expenses, and fees related to litigation?
Aplus Franchise · 2024 FDDAnswer from 2024 FDD Document
For a Turnpike Location, you shall also defend and indemnify the applicable Turnpike Authority and Concessionaire from and against
the above identified
claims,
liabilities, litigation, etc.
- (B) You shall further indemnify and reimburse Sunoco for:
- (1) costs, expenses, and fees (including court costs and attorneys' fees) incurred by Sunoco relating to litigation undertaken successfully by Sunoco against you to enforce, terminate, or nonrenew this Lease, or to collect money or recover Equipment and property due from you to Sunoco.
- (2) costs, expenses, fees (including court costs, attorneys' fees, and cost of litigation), taxes, fines, penalties, and judgments incurred or paid by Sunoco by reason of a violation of law by you.
- (C) The parties hereto agree that, in consideration of Sunoco's execution of this Lease, any claim of any kind by you based on or arising out of this Lease or otherwise shall be barred unless asserted by you by commencement of an action within twelve (12) months after delivery of the products or other event, action, or inaction to which the claim relates.
- (D) All amounts due Sunoco from you, by reason of indemnities and obligations imposed upon you by this Lease, shall become due and payable by you to Sunoco upon demand, as part of your account to Sunoco.
- (E) Notwithstanding any provisions elsewhere set forth above, you shall be liable to Sunoco hereunder, and you do agree to protect, indemnify, and save harmless Sunoco or any other person for claims, losses, and damages, whether caused in part by Sunoco's negligence, but not if caused by Sunoco's sole negligence.
- (F) This Section 2.16 shall survive termination of this Lease.
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 indemnify and reimburse Sunoco for specific costs, expenses, and fees related to litigation. This obligation arises in two primary scenarios. First, if the Aplus location is on a turnpike, the franchisee must defend and indemnify both the turnpike authority and concessionaire against identified claims, liabilities, and litigation. Second, the franchisee must indemnify and reimburse Sunoco for costs, expenses, and fees, including court costs and attorneys' fees, if Sunoco successfully undertakes litigation against the franchisee to enforce, terminate, or nonrenew the lease, or to collect money or recover equipment and property owed to Sunoco.
Additionally, the franchisee is responsible for covering costs, expenses, fees (including court costs, attorneys' fees, and cost of litigation), taxes, fines, penalties, and judgments incurred or paid by Sunoco due to the franchisee's violation of any law. This broad requirement means that any legal issues arising from the franchisee's operational non-compliance can result in significant financial liabilities for the franchisee. The agreement also stipulates that any claim by the franchisee based on the lease is barred unless asserted within twelve months after the event to which the claim relates.
Furthermore, the franchisee is liable to Sunoco for claims, losses, and damages, even if caused in part by Sunoco's negligence, unless the damages are caused by Sunoco's sole negligence. All amounts due to Sunoco from the franchisee under these indemnities become due and payable upon demand as part of the franchisee's account with Sunoco. This section of the lease survives termination, meaning these obligations continue even after the franchise agreement ends. This comprehensive indemnification clause places a significant financial burden on the Aplus franchisee to cover a wide range of potential legal and financial liabilities incurred by Sunoco.