What is the Beverly Anns Cookie franchisee's obligation to cooperate with the Indemnified Parties in the defense of a claim?
Beverly_Anns_Cookie Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to give us notice of any action, suit, proceeding, claim, demand, inquiry or investigation described above. The Indemnified Parties shall have the right, in their sole discretion to: (i) retain counsel of their own choosing to represent them with respect to any claim; and (ii) control the response thereto and the defense thereof, including the right to enter into an agreement to settle such claim. You may participate in such defense at your own expense. You agree to give your full cooperation to the Indemnified Parties in assisting the Indemnified Parties with the defense of any such claim, and to reimburse the Indemnified Parties for all of their costs and expenses in defending any such claim, including court costs and reasonable attorney fees, within ten days of the date of each invoice delivered by such Indemnified Party to you enumerating such costs, expenses and attorney fees.
Source: Item 23 — RECEIPTS (FDD pages 57–235)
What This Means (2025 FDD)
According to the 2025 Beverly Anns Cookie Franchise Disclosure Document, a franchisee is required to provide full cooperation to the Indemnified Parties in defending any claim. This includes assisting the Indemnified Parties in the defense. The franchisee must also reimburse the Indemnified Parties for all costs and expenses incurred in defending the claim, including court costs and reasonable attorney fees. These reimbursements must be made within ten days of receiving an invoice from the Indemnified Party that details these costs, expenses, and attorney fees.
In practical terms, this means that if a claim is made against Beverly Anns Cookie or its affiliates related to the franchisee's business, the franchisee is legally obligated to actively help in the defense. This help could involve providing documents, giving testimony, or any other assistance the Indemnified Parties deem necessary.
The financial implications of this clause could be significant. A franchisee could be responsible for substantial legal costs, including attorney fees, if a claim arises. The franchisee's obligation to cover these costs exists regardless of the outcome of the claim. This arrangement is typical in franchising, as the franchisor seeks to protect its brand and reputation, but it places a considerable financial risk on the franchisee.
It is important for a prospective Beverly Anns Cookie franchisee to understand the scope of this indemnification and cooperation clause. They should carefully consider the potential financial burden of defending against claims and factor this into their decision to invest in the franchise. Seeking legal counsel to review the franchise agreement and clarify these obligations is advisable.