Does the Baya Bar agreement specify that the developer's indemnification obligation extends to settlements of claims?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
DEVELOPER AGREES TO PAY FOR ALL THE BAYA BAR INDEMNITEES' LOSSES, EXPENSES (INCLUDING, BUT NOT LIMITED TO ATTORNEYS' FEES) OR CONCURRENT OR CONTRIBUTING LIABILITY INCURRED IN CONNECTION WITH ANY ACTION, SUIT, PROCEEDING, INQUIRY (REGARDLESS OF WHETHER THE SAME IS REDUCED TO JUDGMENT OR DETERMINATION), OR ANY SETTLEMENT THEREOF FOR THE INDEMNIFICATION GRANTED BY DEVELOPER HEREUNDER. THE BAYA BAR INDEMNITEES SHALL HAVE THE RIGHT TO SELECT AND APPOINT INDEPENDENT COUNSEL TO REPRESENT ANY OF THE BAYA BAR INDEMNITEES IN ANY ACTION OR PROCEEDING COVERED BY THIS INDEMNITY. DEVELOPER AGREES THAT TO HOLD THE BAYA BAR INDEMNITEES HARMLESS, DEVELOPER WILL REIMBURSE THE BAYA BAR INDEMNITEES AS THE COSTS AND EXPENSES ARE INCURRED BY THE BAYA BAR INDEMNITEES.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the developer's indemnification obligations do extend to settlements. Specifically, the developer agrees to cover the Baya Bar indemnitees' losses, expenses (including attorney's fees), or concurrent or contributing liability incurred in connection with any action, suit, proceeding, or inquiry, regardless of whether it is reduced to judgment or determination, or any settlement thereof.
This means that if a claim arises from the development, operation, or condition of the Baya Bar outlet, the products, the premises, or any aspect of the real estate connected to the outlet, the developer is responsible for covering the costs incurred by Baya Bar in connection with any settlement of such claim. This responsibility applies whether the claim is caused by the developer's agents or employees or arises from the developer's advertising or business practices.
Furthermore, Baya Bar has the right to select and appoint independent counsel to represent any of the Baya Bar indemnitees in any action or proceeding covered by this indemnity. The developer is obligated to reimburse Baya Bar indemnitees as costs and expenses are incurred. This clause ensures that Baya Bar can manage its legal defense while the developer bears the financial responsibility for settlements and associated costs.