Does the Bevaris Alliance indemnity cover penalties suffered by the Franchisor?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
with such deletion as may be necessary to make it valid or effective.
21. Indemnity
- 21.1 In this clause, a reference to Franchisor shall include Franchisor's subsidiaries and affiliates, and the provisions of this clause shall be for the benefit of Franchisor and each such subsidiary and affiliate and shall be enforceable by each such subsidiary and affiliate, in addition to Franchisor.
- 21.2 Franchisee shall indemnify Franchisor against all liabilities, costs, expenses, damages and losses (including any direct, indirect or consequential losses, loss of profit, loss of reputation and all interest, penalties and legal costs including attorney's fees (calculated on a full indemnity basis) and all other reasonable professional costs and expenses) suffered or incurred by Franchisor arising out of or in connection with:
- (a) Franchisee's breach or negligent performance or non-performance of this agreement;
- (b) the enforcement of this agreement;
- (c) any claim made against Franchisor by a third party to the extent that such claim arises out of the breach, negligent performance or failure or delay in performance of this agreement by Franchisee, its employees, agents or subcontractors; and
- (d) any claim made against Franchisor by a third party for death, personal injury or damage to property to the extent attributable to the acts or omissions of Franchisee, its employees, agents or subcontractors.
- 21.3 This indemnity shall not cover Franchisor to the extent that a claim under it results from Franchisor's negligence or willful misconduct.
- 21.4 Liability under this indemnity is conditional on Franchisor discharging the following obligations. If any third party makes a claim, or notifies an intention to make a claim, against Franchisor which may reasonably be considered likely to give rise to a liability under this indemnity (Claim), Franchisor shall:
- (a) as soon as reasonably practicable, give written notice of the Claim to Franchisee, specifying the nature of the Claim in reasonable detail;
- (b) not make any admission of liability, agreement or compromise in relation to the Claim without the prior written consent of Franchisee (such consent not to be unreasonably conditioned, withheld or delayed), provided that Franchisor may settle the Claim (after giving prior written notice of the terms of settlement (to the extent legally possible) to Franchisee, but without obtaining Franchisee's consent) if Franchisor reasonably believes that failure to settle the Claim would be prejudicial to it in any material respect;
- (c) give Franchisee and its professional advisers access at reasonable times (on reasonable prior notice) to its premises and its officers, directors, employees, agents, representatives or advisers, and to any relevant assets, accounts, documents and records within the power or control of Franchisor, so as to enable Franchisee and its professional advisers to examine them and to take copies (at Franchisee's expense) for the purpose of assessing the Claim;
Source: Item 23 — RECEIPT (FDD pages 22–88)
What This Means (2024 FDD)
According to the 2024 Bevaris Alliance Franchise Disclosure Document, the franchisee's indemnity does extend to cover penalties suffered or incurred by the franchisor under specific conditions. The franchisee is obligated to indemnify Bevaris Alliance against all liabilities, costs, expenses, damages, and losses, which include direct, indirect, or consequential losses, loss of profit, loss of reputation, interest, penalties, and legal costs, including attorney's fees. This coverage applies if these issues arise from the franchisee's breach, negligent performance, or non-performance of the franchise agreement.
This indemnity also applies to claims made against Bevaris Alliance by a third party if the claim arises from the franchisee's breach, negligent performance, or failure/delay in performing the agreement by the franchisee, its employees, agents, or subcontractors. Additionally, it covers claims against Bevaris Alliance by a third party for death, personal injury, or property damage attributable to the acts or omissions of the franchisee, its employees, agents, or subcontractors.
However, the indemnity does not cover Bevaris Alliance to the extent that a claim results from Bevaris Alliance's own negligence or willful misconduct. This means that while the franchisee bears responsibility for their actions, Bevaris Alliance remains accountable for its own actions and cannot seek indemnity from the franchisee for issues arising from its own negligence or misconduct. This condition protects the franchisee from being liable for the franchisor's mistakes or intentional wrongdoing.
Liability under this indemnity is conditional on Bevaris Alliance fulfilling certain obligations. If a third party makes a claim, or intends to make a claim, against Bevaris Alliance that could lead to liability under this indemnity, Bevaris Alliance must promptly notify the franchisee in writing, detailing the nature of the claim. Bevaris Alliance must not admit liability, make agreements, or compromise the claim without the franchisee's prior written consent, unless settling the claim is reasonably believed to prevent material prejudice to Bevaris Alliance. The franchisor must also allow the franchisee access to relevant information to assess the claim and take actions requested by the franchisee to defend or compromise the claim, provided the franchisee offers security against potential losses.