If an Indemnitee chooses to engage counsel, is the Bft Developer required to immediately reimburse all expenses and fees incurred in connection with the defense?

According to Bft's 2025 Franchise Disclosure Document, the Developer does have to provide immediate reimbursement of expenses if an Indemnitee chooses to engage counsel. Specifically, the Bft franchise agreement stipulates that any Indemnitee (which includes Bft, its owners, affiliates, successors, assigns, and their respective directors, officers, owners, managers, employees, servants, and agents) has the option to hire their own legal counsel to defend against any claim.

If an Indemnitee chooses to engage counsel, the Bft Developer is obligated to provide immediate reimbursement for all expenses and fees incurred in connection with that defense. This requirement is part of the broader indemnification agreement, where the Developer agrees to protect the Indemnitees from losses, damages, claims, liabilities, and causes of action, including attorney's fees and court costs, arising from specific situations. These situations include breaches of the agreement, activities related to the Studios owned by the Developer, gross negligence, intentional misconduct, or violations of applicable laws.

This clause ensures that Indemnitees can mount a vigorous defense without delay, shifting the financial burden to the Developer. It also specifies that Indemnitees are not required to seek recovery from any insurer or mitigate their losses before claiming against the Developer, further strengthening the Indemnitees' position. This indemnification remains effective even after the agreement expires or terminates, providing long-term protection to the Indemnitees.