Does the Bevaris Alliance indemnity cover reasonable professional costs and expenses?
Bevaris_Alliance Franchise · 2024 FDDAnswer from 2024 FDD Document
- 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.
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 cover reasonable professional costs and expenses. Specifically, the franchisee must indemnify Bevaris Alliance against all liabilities, costs, expenses, damages, and losses, including reasonable professional costs and expenses, suffered or incurred by Bevaris Alliance. This arises out of the franchisee's breach, negligent performance, or non-performance of the franchise agreement. It also applies to the enforcement of the agreement, claims made by third parties due to the franchisee's actions, and claims for death, personal injury, or property damage attributable to the franchisee.
This means that if a franchisee's actions or failure to act leads to Bevaris Alliance incurring costs like those from accountants, consultants, or other professionals, the franchisee is responsible for covering those expenses. However, this indemnity does not extend to situations where the claim results from Bevaris Alliance's own negligence or willful misconduct.
There are conditions that Bevaris Alliance must meet to claim indemnity. Bevaris Alliance must provide written notice of any claim to the franchisee, specify the nature of the claim, and not make any admission of liability or settlement without the franchisee's consent. Bevaris Alliance must also allow the franchisee access to relevant information to assess the claim and take action requested by the franchisee to defend the claim, provided the franchisee offers security against potential losses.
This type of indemnity clause is common in franchise agreements, designed to protect the franchisor from liabilities arising from the franchisee's operations. However, franchisees should carefully review the specific terms and conditions to understand the full scope of their obligations and potential financial exposure.