Are settlement amounts included in the Losses and Expenses that Belocal franchisees must indemnify?
Belocal Franchise · 2025 FDDAnswer from 2025 FDD Document
"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.
Source: Item 22 — CONTRACTS (FDD page 71)
What This Means (2025 FDD)
According to Belocal's 2025 Franchise Disclosure Document, franchisees are responsible for covering settlement amounts as part of the Losses and Expenses they must indemnify. The agreement states that "Losses and Expenses" includes various financial burdens, such as damages, fines, costs, and specifically, settlement amounts.
This means that if a claim, suit, or proceeding arises due to the franchisee's actions or inactions related to violations of laws, rules, regulations, or ordinances, the franchisee is obligated to protect, indemnify, defend, and hold Belocal harmless from any associated settlement amounts. This obligation extends to covering losses, compensatory, exemplary, or punitive damages, fines, charges, costs, expenses, lost profits, obligations, liabilities, penalties, reasonable attorneys' fees, court costs, compensation for damages to Belocal's reputation and goodwill, and other related amounts.
The franchisee's duty to indemnify Belocal applies regardless of fault or negligence on the part of Belocal. The franchisee also waives any claims against Belocal arising from these situations. This indemnity survives the expiration or termination of the Franchise Agreement, meaning the franchisee's responsibility to cover these costs continues even after the franchise relationship ends.
This requirement places a significant financial responsibility on Belocal franchisees, as they could be liable for substantial settlement costs arising from various claims or actions. Prospective franchisees should carefully consider this indemnification clause and understand the potential financial implications before investing in a Belocal franchise.