Does the Baya Bar Developer have to indemnify the Franchisor against claims by the transferee?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
Pursuant to the above, Developer agrees to indemnify Franchisor and hold Franchisor harmless from any and all liability, loss, attorney's fees, or damage Franchisor may suffer as a result of claims, demands, taxes, costs or judgments against Franchisor arising out of the relationship hereby established which specifically, but not exclusively, includes costs, losses, expenses, attorneys fees relative to assignment or the transfer of right to develop and transactional costs relative thereto, defaults under any leases, subleases, notes, receipt of revenues or any other relationships arising directly or indirectly out of the development and operation of the Baya Bar outlets.
Source: Item 23 — RECEIPTS (FDD pages 56–189)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the developer is required to indemnify the franchisor under certain conditions, but the FDD excerpts provided do not explicitly address whether this indemnification extends to claims made by a transferee.
However, the document does state that the developer must indemnify Baya Bar from liability, loss, attorney's fees, or damage the franchisor may suffer as a result of claims, demands, taxes, costs, or judgments against Franchisor arising out of the relationship established. This includes costs, losses, expenses, and attorney's fees related to the assignment or transfer of the right to develop and transactional costs, defaults under leases, and any other relationships arising directly or indirectly from the development and operation of Baya Bar outlets.
Because the excerpts do not specifically address claims by a transferee, a prospective Baya Bar franchisee should clarify with the franchisor whether the indemnification extends to claims made by a transferee. This clarification is crucial to fully understand the scope of the developer's responsibilities and potential liabilities during and after a transfer.