What is the impact of the indemnified party's strict liability on a Best Brains franchisee's obligation to indemnify?
Best_Brains Franchise · 2025 FDDAnswer from 2025 FDD Document
Any provision in the franchise agreement or related agreements requiring the franchisee to indemnify, reimburse, defend, or hold harmless the franchisor or other parties is hereby modified such that the franchisee has no obligation to indemnify, reimburse, defend, or hold harmless the franchisor or any other indemnified party for losses or liabilities to the extent that they are caused by the indemnified party's negligence, willful misconduct, strict liability, or fraud.
Source: Item 21 — FINANCIAL STATEMENTS (FDD page 42)
What This Means (2025 FDD)
According to Best Brains' 2025 Franchise Disclosure Document, a franchisee's obligation to indemnify the franchisor or other indemnified parties is limited when the indemnified party is strictly liable. Specifically, the franchisee is not required to cover losses or liabilities resulting from the indemnified party's strict liability. This modification protects the franchisee from shouldering the financial burden of situations where the franchisor is held liable, regardless of fault. This protection applies in Washington state.
This provision is beneficial for prospective Best Brains franchisees as it reduces their potential financial exposure. Indemnification clauses in franchise agreements typically require franchisees to protect the franchisor from various claims and liabilities. However, this modification ensures that franchisees are not responsible for liabilities arising from the franchisor's own strict liability. This can provide a level of financial security and predictability for the franchisee.
It is important for prospective Best Brains franchisees to understand the scope and limitations of this indemnification clause. While it offers protection against the franchisor's strict liability, it does not cover other potential liabilities, such as those arising from the franchisee's own negligence or intentional misconduct. Franchisees should carefully review the franchise agreement and seek legal counsel to fully understand their indemnification obligations and rights.