Under the Bft Development Agreement, can an Indemnitee choose their own counsel to defend against a claim?
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, an Indemnitee has the option to choose their own legal counsel to defend against any claim. The Indemnitee can also demand immediate reimbursement from the Developer for all expenses and fees associated with the defense. This right exists regardless of whether the Development Agreement expires or terminates.
This clause means that Bft, its owners, affiliates, successors, assigns, and their respective directors, officers, owners, managers, employees, servants, and agents (collectively, the "Indemnitees") are protected. If a claim arises related to the Developer's actions or breaches of the agreement, the Indemnitees can hire their own attorneys to defend themselves.
This is a significant protection for Bft, as it allows them to control their legal defense and ensures they can seek reimbursement for legal costs from the Developer. The Indemnitees do not need to seek recovery from any insurer or mitigate their losses before claiming against the Developer. This clause ensures Bft can fully recover losses and expenses from the Developer without having to pursue other avenues of compensation first.