Does Baya Bar require the franchisee to reimburse the Baya Bar indemnitees as costs and expenses are incurred?
Baya_Bar Franchise · 2024 FDDAnswer from 2024 FDD Document
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, franchisees are required to reimburse Baya Bar indemnitees for costs and expenses as they are incurred. This obligation arises from the indemnification clause in the franchise agreement.
Specifically, the franchisee agrees to exonerate, indemnify, and hold harmless Baya Bar Franchise Systems, LLC, along with its parent company, subsidiaries, affiliates, directors, officers, employees, agents, shareholders, successors, designees, and representatives from all claims related to the franchisee's franchise operation. This includes claims related to employees, computer systems, food and beverage handling, the business premises, and advertising or business practices.
The franchisee is responsible for covering all losses and expenses, including attorney's fees, incurred by the Baya Bar indemnitees in connection with any action, suit, proceeding, or inquiry related to the indemnification. The agreement explicitly states that the franchisee will reimburse the Baya Bar indemnitees as these costs and expenses are incurred. This means franchisees must be prepared to provide ongoing reimbursement during any legal process, rather than waiting for a final judgment.