Does a Benihana franchisee agree to indemnify Benihana and its affiliates from losses arising from the construction, operation, or condition of the Restaurant, both during and after the Franchise Term?
Benihana Franchise · 2024 FDDAnswer from 2024 FDD Document
- 12.4 Franchisee agrees, during and after the Franchise Term, to indemnify, defend and hold harmless BNC and its affiliates and their respective stockholders, members, agents, officers and directors, from and against any and all losses, costs, damages, expenses, claims, demands, proceedings, suits, and liabilities, including attorneys' fees and costs, arising directly or indirectly from, as a result of, or in connection with the construction, operation, condition, use or occupancy of the Restaurant. If the indemnity provided herein arises in connection with a claim made by a third-party ("Third-Party Claim"), BNC shall have the right independently to take any action it may deem necessary, in its sole discretion, to protect or defend itself and the persons and entities indemnified against any the Third-Party Claim, without regard to the expense, forum or other parties that may be involved. BNC shall have sole and exclusive control over the defense of any Third-Party Claim, and over the settlement, compromise or other disposition thereof, as well as the right to be represented by counsel of its own choosing. Franchisee's obligations hereunder shall include the cost of BNC's defense of any Third-Party Claim, the amount of any final judgment (including interest through the date of payment) which may be rendered against BNC, and any settlement reasonably agreed to by BNC. At the request of BNC, Franchisee shall enter into a separate indemnification agreement based on the foregoing terms directly with any of the persons or entities indemnified hereunder.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, a franchisee agrees to indemnify, defend, and hold harmless Benihana and its affiliates from losses, costs, damages, expenses, claims, demands, proceedings, suits, and liabilities, including attorney's fees and costs. This indemnification covers issues arising directly or indirectly from the construction, operation, condition, use, or occupancy of the Benihana Restaurant. This obligation extends both during and after the franchise term.
If a third-party claim arises, Benihana has the right to take any action it deems necessary to protect or defend itself and the indemnified parties, regardless of expense, forum, or other parties involved. Benihana maintains sole and exclusive control over the defense of any third-party claim, including settlement, compromise, or other disposition, and has the right to be represented by counsel of its choosing.
The franchisee's obligations include covering the cost of Benihana's defense of any third-party claim, the amount of any final judgment (including interest through the date of payment) rendered against Benihana, and any settlement reasonably agreed to by Benihana. At Benihana's request, the franchisee must enter into a separate indemnification agreement with any of the persons or entities indemnified under these terms. This is a common clause in franchise agreements, designed to protect the franchisor from liabilities associated with the franchisee's business operations.