Does the indemnification clause in the Beef O Bradys Area Development Agreement continue after the agreement's expiration or termination?
Beef_O_Bradys Franchise · 2025 FDDAnswer from 2025 FDD Document
s between us or our affiliates and you, your Affiliates and/or any guarantor of yours. If the nature of the default under any other agreement would have permitted us (or our affiliate) to terminate this Agreement if the default had occurred under this Agreement, then we will have the right to terminate all such other agreements in the same manner provided for in this Agreement for termination hereof.
10. EFFECT OF TERMINATION AND EXPIRATION.
- 10.1 Continuing Obligations. All of the obligations under this Agreement which expressly or by their nature survive the expiration or termination of this Agreement continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement, until they are satisfied in full or by their nature expire. Within 5 days immediately following termination or expiration of this Agreement for any reason, you must pay to us all fees or other amounts due us under this Agreement, or any other agreement, note, or obligation between you and us.
- 10.2 Post-Term Competitive Restrictions. Upon termination or expiration of this Agreement for any reason, you and your Owners agree that, for a period of 2 years commencing on the effective date of termination or expiration, no Restricted Person will have any direct or indirect interest (e.g. through a spouse, child, or other family member) as a disclosed or beneficial owner, investor, partner, director, officer, employee, consultant, member, manager, representative or agent or in any other capacity in any Competitive Business operating:
- (a) Site. At any Site or within the Development Area;
- (b) Within 15 Miles of Site. Within 15 miles of any Site or the Development Area; or
- (c) Within 15 Miles of Any Other Family Sports Pub. Within 15 miles of any other Family Sports Pub that is planned, in operation or under construction on the later of the effective date of the termination or expiration.
Source: Item 23 — RECEIPTS. (FDD pages 66–330)
What This Means (2025 FDD)
According to Beef O Bradys's 2025 Franchise Disclosure Document, the obligations outlined in the Area Development Agreement that, either explicitly or by their inherent nature, are meant to extend beyond the termination or expiration of the agreement will remain in full effect. These obligations will persist regardless of the termination or expiration, continuing until they are either completely fulfilled or naturally expire. This includes the indemnification clause.
This means that even after the Area Development Agreement ends, certain responsibilities, such as financial obligations and adherence to non-compete clauses, may still apply to the franchisee. Specifically, any fees or amounts owed to Beef O Bradys must be paid within five days of the agreement's termination or expiration. Furthermore, for a period of two years post-termination or expiration, the franchisee and their owners are restricted from engaging in any competitive business within a specific geographic area.
For a prospective Beef O Bradys franchisee, this implies a long-term commitment that extends beyond the formal agreement period. It is crucial to understand which obligations survive termination or expiration, as these can significantly impact future business activities. Franchisees should carefully review the Area Development Agreement to identify all such continuing obligations and seek legal counsel to fully understand their scope and implications.
However, in the state of Indiana, this indemnification clause has an exception. According to the FDD, franchisees in Indiana will not be required to indemnify Beef O Bradys and other indemnitees for any liability caused by the franchisee's proper reliance on or use of procedures or materials provided by Beef O Bradys or caused by Beef O Bradys's negligence.