Does the Baya Bar franchisee's indemnification obligation extend to claims related to the franchisee's computer systems?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.6 Indemnification. TO THE FULLEST EXTENT PERMITTED BY LAW, FRANCHISEE AGREES TO EXONERATE AND INDEMNIFY AND HOLD HARMLESS BAYA BAR FRANCHISE SYSTEMS, LLC, BAYA BAR, LLC, AND ANY OF THESE COMPANIES' PARENT COMPANY, SUBSIDIARIES, DIVISIONS, AFFILIATES, SUCCESSORS, ASSIGNS AND DESIGNEES AS WELL AS THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SHAREHOLDERS, SUCCESSORS, DESIGNEES AND REPRESENTATIVES (COLLECTIVELY REFERRED TO AS THE "BAYA BAR INDEMNITEES"), FROM ALL CLAIMS BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATED TO FRANCHISEE'S FRANCHISE AND/OR THE OPERATION THEREOF, INCLUDING BUT NOT LIMITED TO, ANY CLAIM IN CONNECTION WITH FRANCHISEE'S EMPLOYEES OR AGENTS; FRANCHISEE'S COMPUTER SYSTEMS; FRANCHISEE'S PREPARATION, STORAGE, HANDLING AND/OR DISPOSAL OF FOOD OR BEVERAGE PRODUCTS; THE FRANCHISED BUSINESS PREMISES; OR FRANCHISEE'S ADVERTISING OR BUSINESS PRACTICES. FRANCHISEE AGREES TO PAY FOR ALL 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 FRANCHISEE 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. FRANCHISEE AGREES THAT TO HOLD THE BAYA BAR INDEMNITEES HARMLESS, FRANCHISEE WILL REIMBURSE THE BAYA BAR INDEMNITEES AS THE COSTS AND EXPENSES ARE INCURRED BY THE BAYA BAR INDEMNITEES.
Source: Item 22 — CONTRACTS (FDD page 56)
What This Means (2024 FDD)
According to Baya Bar's 2024 Franchise Disclosure Document, the franchisee's indemnification obligations do extend to claims related to the franchisee's computer systems. The franchisee agrees to indemnify Baya Bar Franchise Systems, LLC from all claims arising out of or related to the franchisee's franchise operation. This explicitly includes claims connected to the franchisee's computer systems.
This means that if a claim is made against Baya Bar due to an issue involving the franchisee's computer systems, the franchisee is responsible for covering Baya Bar's losses, expenses, and any concurrent or contributing liability. These expenses include attorney's fees incurred in connection with any action, suit, proceeding, or inquiry, regardless of whether it results in a judgment or determination. The franchisee is also responsible for reimbursing Baya Bar for these costs and expenses as they are incurred.
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. This clause places a significant financial responsibility on the franchisee, as they could be liable for substantial costs if a claim arises related to their computer systems. Prospective franchisees should carefully consider this indemnification obligation and ensure they have adequate safeguards in place to protect their computer systems and mitigate potential risks.