Does the Bft indemnification clause cover claims arising from the Developer's employment practices?
Bft Franchise · 2025 FDDAnswer from 2025 FDD Document
B. Indemnification. Developer agrees to indemnify, defend and hold Franchisor, its owners, affiliates, successors and assigns, and the directors, officers, owners, managers, employees, servants, agents of each (collectively, the "Indemnitees"), harmless from and against any and all losses, damage, claims, demands, liabilities and causes of actions of every kind or character and nature, as well as costs and expenses incident thereto (including reasonable attorneys' fees and court costs), that are brought against any of the Indemnitees that arise out of or are otherwise related to Developer's or an Indemnitee's (a) breach or attempted breach of, or misrepresentation under, this Agreement or in connection with the exercise of the Development Rights in any manner other than as authorized herein; (b) ownership, construction, development, management, or operation of any Studios that Developer or its affiliates own, including, without limitation, Developer's or an Indemnitee's employment practices; (c) gross negligence or intentional misconduct; and/or (d) alleging Developer's or its representatives' violation of Applicable Laws as set forth in Section 13.D below. Notwithstanding the foregoing, any Indemnitee may choose to engage counsel and defend against any such claim and may require immediate reimbursement from the Developer of all expenses and fees incurred in connection with such defense. This indemnity will continue in full force and effect subsequent to and notwithstanding this Agreement's expiration or termination. Indemnitees need not seek recovery from any insurer or other third party, or otherwise mitigate its losses and expenses, in order to maintain and recover fully a claim against Developer under this Section. Any Indemnitee's failure to pursue a recovery or mitigate a loss will not reduce or alter the amounts that person may recover from Developer under this Section.
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 57–66)
What This Means (2025 FDD)
According to Bft's 2025 Franchise Disclosure Document, the indemnification clause does cover claims arising from the Developer's employment practices. The Developer (franchisee) agrees to indemnify, defend, and hold harmless Bft (the Franchisor) and its affiliates from any losses, damages, claims, liabilities, and causes of action, including attorney's fees and court costs, that arise out of or are related to the Developer's or an Indemnitee's ownership, construction, development, management, or operation of any Studios, specifically including the Developer's employment practices.
This means that if a claim is brought against Bft due to the Developer's employment practices, the Developer is responsible for covering the costs of defending against the claim and any resulting liabilities. Bft can choose its own counsel and require immediate reimbursement from the Developer for all expenses and fees incurred in connection with the defense.
This indemnification continues even after the agreement expires or terminates. Bft does not need to seek recovery from any insurer or mitigate its losses before making a claim against the Developer. The Developer's responsibility to indemnify Bft is comprehensive and remains in effect regardless of any other actions Bft may take.