Is the Belocal franchisee required to indemnify for property damage caused by the Franchised Business?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
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any Franchisee Indemnifying Party, any Independent Staff, or the Franchised Business; (2) any damage to property caused by any Franchisee Indemnifying Party, any Independent Staff, or the Franchised Business; (3) injury to or death or disability of any person caused by any Franchisee Indemnifying Party, any Independent Staff, or the Franchised Business; (4) any negligence, recklessness, misconduct, or criminal conduct by any Franchisee Indemnifying Party, the operations managers, or any Independent Staff; (5) data breaches related to the Franchised Business or the business of Franchisor or any of its affiliates; (6) any breach of this Agreement or any representations and warranties herein by any Franchisee Indemnifying Party; (7) infringement of any intellectual property rights by any Franchisee Indemnifying Party or any Independent Staff, or otherwise related to the operation of the Franchised Business; (8) any failure by any Franchisee Indemnifying Party, any Independent Staff, or the Franchised Business to warn or give instructions related to any products or services provided by Indemnitees or by Franchisee; (9) any labor or employment law disputes relating to the Franchised Business or claims arising out of Franchisee's employment practices, including claims that any of the Indemnities are the employer, joint employer, or co-employer of Franchisee, any Principal, or Franchisee's agents, employees, or contractors; (10) any thirdparty claim that arises from or that explicitly or implicitly is premised on Franchisor's direct and vicarious liability or that arises from Franchisee's employment and personnel decisions, including wrongful termination, wage and hour violations, and employee harassment and discrimination claims; (11) any acts, errors, or omissions of the Franchised Business, any Franchisee Indemnifying Party, and/or any Independent Staff; (12) the content of, advertisements in, and distribution of the Publication; (13) losses, claims, or damages incurred by persons, other than Franchisee, due to errors or omissions contained in financial statements prepared by any Franchisee Indemnifying Party pursuant to this Agreement, even if cause by the negligence of any Franchisee Indemnifying Party or others for whom Franchisee is responsible under the law; or (14) any third-party claim that arises from or is connected with the ownership, establishment, operation, or closure of the Franchised Business and/or the Publication.
"Losses and Expenses" includes, without limitation, all losses, compensatory, exemplary, or punitive damages, fines, charges, costs, expenses, lost profits, obligations, liabilities, penalties, reasonable attorneys' fees, court costs, settlement amounts, judgments, compensation for damages to Franchisor's reputation and goodwill, and other such amounts incurred in connection with the matters described in Section 12.B.(1) above. This indemnity shall survive the expiration or termination of this Agreement. Each Franchisee Indemnifying Party agrees that this obligation to indemnify applies regardless of the cause or any concurrent or contributing fault or negligence of the Indemnitees. Each Franchisee Indemnifying Party hereby waives all claims against Indemnitees arising from any of the foregoing.
(2) Franchisee shall also notify Franchisor by telephone of any Action within fortyeight (48) hours after such Action is initiated and in writing within four (4) days after such Action is initiated.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, franchisees are required to indemnify the franchisor against property damage caused by the franchised business. Specifically, the franchisee must indemnify the franchisor from any losses, expenses, judgments, claims, attorney fees, and damages arising from property damage caused by the franchisee, their staff, or the franchised business itself. This means that if the Belocal business operations result in damage to someone's property, the franchisee is responsible for covering the associated costs and legal liabilities of the franchisor.
This indemnification clause places a significant financial responsibility on the Belocal franchisee. It's not just about covering the cost of repairs; it extends to legal defense and any judgments against the franchisor. The franchisee's responsibility extends to the actions of their independent staff and the overall operation of the business.
To mitigate this risk, Belocal requires franchisees to maintain comprehensive general liability insurance, including broad-form property damage coverage, with a $2,000,000 combined single limit per occurrence and a $4,000,000 general aggregate. This insurance is intended to protect the franchisee (and by extension, the franchisor) from significant financial losses due to property damage claims. Franchisees should carefully review their insurance policies to ensure they adequately cover potential liabilities related to property damage and other operational risks.
In addition to insurance, Belocal franchisees should implement robust risk management practices to minimize the likelihood of property damage. This includes training staff, maintaining equipment, and adhering to safety protocols. Understanding the full scope of the indemnification obligations and taking proactive steps to manage risks are crucial for protecting the franchisee's financial interests.