Does the Aunt Millies Bakeries agreement require either party to indemnify the other against third-party claims?

According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, the agreement does include an indemnification clause. Specifically, each party (Aunt Millie's Bakeries and the distributor) agrees to defend, indemnify, and hold the other harmless from third-party claims. This protection extends to any costs, charges, or claims, including reasonable attorneys' fees, expert fees, and settlement costs.

This indemnification obligation is triggered by a party's direct or indirect failure to perform any obligation or discharge any liability under the agreement, or from the party's negligence. This means that if Aunt Millies Bakeries fails to meet its obligations and this failure leads to a third-party claim against the distributor, Aunt Millies Bakeries will have to cover the distributor's costs in defending against that claim. The same applies vice versa, where the distributor's actions lead to claims against Aunt Millies Bakeries.

For a prospective Aunt Millies Bakeries distributor, this clause offers a degree of financial protection against potential liabilities arising from the actions of Aunt Millies Bakeries or from the distributor's own operations, provided they stem from obligations under the agreement or negligence. However, it's important to carefully review the scope of this indemnification with legal counsel to fully understand the types of claims covered and any limitations that may apply. Understanding the specific circumstances under which indemnification applies is crucial for managing risk as a franchisee.