Does the Beggars Pizza franchisee's indemnification obligation survive the termination or expiration of the franchise agreement?
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 the 2025 Beggars Pizza Franchise Disclosure Document, the franchisee's obligation to indemnify the franchisor does indeed survive the termination or expiration of the franchise agreement. This means that even after the franchise agreement ends, whether through termination or expiration of its term, the franchisee remains responsible for covering certain claims, losses, costs, expenses, liabilities, and damages.
Specifically, the franchisee must indemnify and hold harmless Beggars Pizza and its affiliates, as well as their officers, directors, and employees. This protection extends to any claims, losses, costs, expenses, liabilities, and damages that arise directly or indirectly from the franchisee's operation of the restaurant. It also includes issues related to the business conducted under the agreement, the franchisee's failure to comply with applicable laws and regulations, or the franchisee's breach of the agreement.
However, there is an exception: Beggars Pizza cannot seek indemnification for claims, obligations, and damages determined to be caused solely by their gross negligence or willful misconduct, as ruled by a court with competent jurisdiction. Furthermore, if Beggars Pizza incurs costs or expenses in 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 upon presentation of invoices. This includes legal fees, travel expenses, and other charges. This extended responsibility is a critical aspect for prospective franchisees to consider, as it has long-term financial implications even after the franchise relationship concludes.