Does the Beggars Pizza franchisee's indemnification obligation include claims arising from the franchisee's failure to comply with applicable laws and regulations?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee must indemnify and hold harmless Franchisor and its affiliates, and their respective officers, directors and employees against any claims, losses, costs, expenses, liabilities, and damages arising directly or indirectly from, as a result of, or in connection with Franchisee's operation of the Restaurant, the business conducted under the Agreement, Franchisee's failure to comply with applicable regional, national, international, and local laws and regulations as described herein, or Franchisee's breach of the Agreement including, without limitation, those alleged to be caused by Franchisor's negligence unless (and then only to the extent
that) the claims, obligations, and damages are determined to be caused solely by Franchisor's gross negligence or willful misconduct according to a final, unappealable ruling issued by a court with competent jurisdiction and the costs including, without limitation, reasonable attorneys' fees of defending against them. If Franchisor incurs any costs or expenses including, without limitation, legal fees, travel expenses, and other charges in connection with any proceeding involving Franchisee in which Franchisor is not a party, Franchisee must reimburse Franchisor for all such costs and expenses promptly upon presentation of invoices. Franchisee's indemnification and hold harmless obligations under this Section 20 will survive the termination or expiration of the Agreement. Nothing herein will preclude Franchisor from choosing its own legal counsel to represent it in any lawsuit, arbitration, or other dispute resolution.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the franchisee's indemnification obligations do extend to claims arising from their failure to comply with applicable laws and regulations. Specifically, the franchisee must indemnify and hold harmless Beggars Pizza and its affiliates, as well as their officers, directors, and employees, from any claims, losses, costs, expenses, liabilities, and damages. This indemnification obligation applies to issues arising directly or indirectly from, or as a result of, the franchisee's operation of the restaurant, the business conducted under the Franchise Agreement, or the franchisee's failure to comply with applicable regional, national, international, and local laws and regulations.
This means that if a Beggars Pizza franchisee fails to comply with any applicable laws or regulations and this failure results in claims, losses, or damages to Beggars Pizza, the franchisee will be responsible for covering these costs. This includes, but is not limited to, legal fees and other expenses incurred in defending against such claims. However, there is an exception: the franchisee is not responsible for indemnifying Beggars Pizza if the claims, obligations, and damages are determined to be caused solely by Beggars Pizza's gross negligence or willful misconduct, as determined by a final, unappealable court ruling.
Furthermore, if Beggars Pizza incurs any costs or expenses, including legal fees and travel expenses, in connection with any proceeding involving the franchisee in which Beggars Pizza is not a party, the franchisee must reimburse Beggars Pizza for all such costs and expenses promptly upon presentation of invoices. This indemnification obligation survives the termination or expiration of the Franchise Agreement, meaning that even after the agreement ends, the franchisee may still be responsible for indemnifying Beggars Pizza for claims arising from their operation of the restaurant. Beggars Pizza retains the right to choose its own legal counsel in any lawsuit, arbitration, or other dispute resolution.