Does the Apricot Lane franchisee indemnify the franchisor for obligations pertaining to construction or other pre-opening obligations under the Franchise Agreement?
Apricot_Lane Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE shall defend at its own cost and indemnify and hold harmless FRANCHISOR and FRANCHISOR's shareholders, directors, officers, employees and agents, from and against any and all loss, costs, expenses (including, without limitation, reasonable accountants', attorneys' and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses), damages, causes of action, demands and liabilities, however caused, resulting directly or indirectly from any acts or omissions of FRANCHISEE or its agents, representatives, employees or contractors, including but not limited to those from or pertaining to the construction or operation of the Franchised Business, the use of the Marks by FRANCHISEE or any breach of this Agreement by FRANCHISEE unless such damages or liabilities were proximately caused by the negligence or unlawful conduct of FRANCHISOR. All such indemnification obligations shall survive termination or expiration of this Agreement for any reason. **Initial
Source: Item 23 — RECEIPTS (FDD pages 51–222)
What This Means (2025 FDD)
According to the 2025 Apricot Lane Franchise Disclosure Document, the franchisee is required to indemnify the franchisor under certain conditions. Specifically, the franchisee must defend and hold Apricot Lane harmless from any losses, costs, or expenses resulting from the franchisee's actions or omissions related to the construction or operation of the franchised business. This includes legal fees and other litigation expenses.
This indemnification extends to any breach of the Franchise Agreement by the franchisee, unless the damages or liabilities were directly caused by the negligence or unlawful conduct of Apricot Lane itself. This means that if a third party sues Apricot Lane due to something the franchisee did (e.g., faulty construction), the franchisee is responsible for covering Apricot Lane's legal costs and any resulting damages, provided Apricot Lane was not at fault.
This obligation survives the termination or expiration of the Franchise Agreement, meaning that even after the franchise relationship ends, the franchisee remains responsible for any liabilities stemming from their actions during the term of the agreement. Franchisees must initial the section in the FDD acknowledging this indemnification obligation.
However, Apricot Lane does not assume any liability for the franchisee's business by providing approvals, advice, or services. This means that while Apricot Lane may offer guidance, the franchisee is ultimately responsible for the business's operations and any liabilities that arise from them. Franchisees are also responsible for all taxes related to their business.