Which section of the Distribution Agreement outlines the indemnification obligations of an Aunt Millies Bakeries franchisee?

According to Aunt Millies Bakeries's 2025 Franchise Disclosure Document, Section 12.5 of the Distribution Agreement covers the indemnification obligations of both the franchisee (referred to as the "Distributor") and Aunt Millie's Bakeries. Indemnification is a legal term referring to an agreement where one party agrees to protect another party from financial loss or liability.

Specifically, Section 12.5 states that each party agrees to defend, indemnify, and hold the other harmless against third-party claims. This includes costs, charges, claims, reasonable attorneys' fees, expert fees, and settlement costs. These expenses must arise from a party's direct or indirect failure to perform any obligation or discharge any liability under the Distribution Agreement, or from the party's negligence.

In practical terms, this means that if Aunt Millie's Bakeries is sued by a third party due to something the franchisee did (or failed to do) related to their obligations under the Distribution Agreement or their negligence, the franchisee would have to cover Aunt Millie's Bakeries's legal costs and any resulting damages. The same applies if the situation is reversed, and Aunt Millie's Bakeries must indemnify the franchisee. Prospective franchisees should carefully review this section with a legal professional to fully understand their potential liabilities and obligations.