Under what condition will Bang Cookies reimburse a franchisee for expenses incurred while assisting in litigation?
Bang_Cookies Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisor shall indemnify, defend, and hold Franchisee and Franchisee's officers, directors, shareholders, members, owners, partners, agents, representatives, independent contractors, employees, assigns and successors (the "Franchisee Indemnified Parties") harmless from all losses, expenses, claims, causes of action, lawsuits, liabilities, taxes, costs, demands, proceedings, investigation, hearing, and/or damages solely arising out of, or solely relating to, Franchisor's gross negligence in the operation of Franchisee's Bang Cookies Shop that was the direct cause of any such loss, expense, liability or damage provided Franchisee immediately notifies Franchisor of such claim, cause of action, lawsuit, demand, proceeding, investigation or hearing, and Franchisor shall pay all of the Franchisee Indemnified Parties' reasonable costs, fees and expenses of defending any such claim, cause of action, lawsuit, demand, proceeding, investigation, and/or hearing brought against any of the Franchisee Indemnified Parties or any such claim, cause of action, lawsuit, demand, proceeding, investigation, and/or hearing in which any of the Franchisee Indemnified Parties is named as a party, including, without limitation, reasonable accountant fees, attorney fees, and expert witness fees, court costs, deposition fees, travel expenses and other litigation expenses provided Franchisee immediately notifies Franchisor of such claim, cause of action, lawsuit, demand, proceeding, investigation or hearing. Franchisor agrees that the terms of this Article 10.C. shall survive the termination, expiration or Transfer of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 56–245)
What This Means (2024 FDD)
According to Bang Cookies' 2024 Franchise Disclosure Document, Bang Cookies will indemnify and defend the franchisee from losses, expenses, claims, lawsuits, liabilities, taxes, costs, demands, proceedings, investigations, hearings, and/or damages solely arising out of, or solely relating to, Bang Cookies' gross negligence in the operation of the franchisee's Bang Cookies Shop.
For Bang Cookies to be responsible, the gross negligence must be the direct cause of the loss, expense, liability, or damage. The franchisee must also immediately notify Bang Cookies of any claim, cause of action, lawsuit, demand, proceeding, investigation, or hearing. If these conditions are met, Bang Cookies will cover the franchisee's reasonable costs, fees, and expenses of defending against such claims.
These covered expenses include reasonable accountant fees, attorney fees, expert witness fees, court costs, deposition fees, travel expenses, and other litigation expenses. This indemnification agreement survives the termination, expiration, or transfer of the Franchise Agreement.