Under what circumstances related to Studio ownership, construction, development, management, or operation is a Bft Developer required to indemnify the Indemnitees?
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, a Developer must indemnify the Indemnitees (which include Bft, its owners, affiliates, successors, assigns, and their respective directors, officers, owners, managers, employees, servants, and agents) against losses, damages, claims, demands, liabilities, and causes of action, as well as related costs and expenses, under certain circumstances. Specifically, this obligation arises from issues related to the ownership, construction, development, management, or operation of any Bft Studios owned by the Developer or its affiliates, including their employment practices.
This means that if a claim is made against Bft or its related parties due to something that happens at a Bft Studio owned by the Developer, such as a customer injury during construction or a lawsuit from an employee, the Developer is responsible for covering the costs of defending against and settling that claim. This indemnification extends to reasonable attorneys' fees and court costs.
Bft also specifies that the Indemnitees are not required to seek recovery from any insurer or mitigate their losses before seeking full recovery from the Developer. Furthermore, any failure by the Indemnitees to pursue recovery or mitigate a loss does not reduce the Developer's indemnification obligations. This indemnity remains in effect even after the Multi-Unit Agreement expires or terminates, highlighting the long-term financial responsibility the Developer assumes.