Under what circumstances is a Beggars Pizza franchisee required to indemnify the franchisor?
Beggars_Pizza Franchise · 2025 FDDAnswer from 2025 FDD Document
Guarantors must defend, indemnify, and hold Franchisor and Begcom harmless against any losses, damages, liabilities, costs, and expenses including, without limitation, reasonable attorneys' fees, reasonable costs of investigation, court costs, and arbitration fees and expenses resulting from, consisting of, or arising out of or in connection with any failure by Franchisee to perform any obligation of Franchisee under the Agreements, any amendments thereto, or any other agreements executed by Franchisee in connection with the Agreements.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Beggars Pizza's 2025 Franchise Disclosure Document, the franchisee's principals (Guarantors) must defend, indemnify, and hold Beggars Pizza and Begcom LLC harmless against any losses, damages, liabilities, costs, and expenses. These expenses include reasonable attorneys' fees, costs of investigation, court costs, and arbitration fees.
This indemnification requirement is triggered by any failure of the franchisee to perform their obligations under the Franchise Agreement, any amendments to it, or any other agreements executed in connection with the Franchise Agreement. This means that if the franchisee breaches the agreement in any way, the guarantors are responsible for covering any resulting costs incurred by Beggars Pizza and Begcom LLC.
In practical terms, this clause places a significant financial responsibility on the franchisee's principals. They are not only guaranteeing the franchisee's performance but also agreeing to cover any legal and associated costs if the franchisee fails to meet their obligations. Prospective franchisees should carefully consider this obligation and ensure they fully understand the scope of the agreements and their potential liabilities.