What is the franchisee's obligation regarding indemnification of the Franchisor Indemnified Parties under the Bang Cookies franchise agreement?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee and each Owner acknowledge and agree that the terms of this Article 10.B. shall survive the termination, expiration or Transfer of this Agreement.
Under no circumstances are the Franchisor Indemnified Parties required or obligated to seek recovery from third parties or otherwise mitigate their respective losses in order to maintain a claim against Franchisee or any Owner.
Franchisee and each of the Owners agree that Franchisor's failure to pursue recovery or mitigate loss in no way reduces the amounts recoverable from Franchisee or any Owner.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, the franchisee and each owner acknowledge and agree that the terms of Article 10.B, which likely outlines the indemnification obligations, will remain in effect even after the termination, expiration, or transfer of the franchise agreement.
Under the Bang Cookies franchise agreement, the Franchisor Indemnified Parties are not required to seek recovery from third parties or mitigate their losses before making a claim against the franchisee or any owner. This means Bang Cookies can pursue a claim against the franchisee without first trying to recover losses from other sources.
The franchisee and owners also agree that Bang Cookies' failure to pursue recovery or mitigate loss does not reduce the amount the franchisee or owners owe. This clause protects Bang Cookies' right to full recovery from the franchisee, regardless of whether Bang Cookies has attempted to minimize the loss through other means. This places the full burden of indemnification on the franchisee, potentially increasing their financial risk.