Does the Benihana franchisee's obligation to indemnify BNC extend beyond 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 involve
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2024 FDD)
According to Benihana's 2024 Franchise Disclosure Document, the franchisee's obligation to indemnify Benihana extends beyond the Franchise Term. Specifically, the franchisee agrees, both during and after the Franchise Term, to protect Benihana and its affiliates from any losses, costs, damages, expenses, claims, demands, proceedings, suits, and liabilities. This includes attorneys' fees and costs.
This indemnification obligation arises from, as a result of, or in connection with the construction, operation, condition, use, or occupancy of the Benihana Restaurant. If a claim is made by a third party, Benihana has the right to take any action it deems necessary to protect itself and the indemnified parties, regardless of the expense, forum, or other parties involved.
This means that even after the franchise agreement ends, a former Benihana franchisee could still be responsible for financial losses incurred by Benihana due to issues related to the restaurant's operation during the franchise term. This could include legal fees, settlement costs, or other expenses arising from lawsuits or claims. Franchisees should understand this long-term liability and factor it into their business planning and risk management strategies.