What is excluded from the Bhc franchisee's obligation to indemnify the franchisor?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) Franchisee and its Principal Equity Operators, jointly and severally, hereby agree to protect, defend and indemnify Franchisor, and all of Franchisor's past, present and future owners, affiliates, officers, directors, employees, attorneys and designees, and each of them, and hold them harmless from and against any and all Losses arising out of or in connection with any "Proceeding" (as defined in section 16.2(f) below) concerning Franchisee's intentional tort or negligence, or the intentional tort or negligence of Franchisee's agents, servants or representatives, relating to Franchisee's development, maintenance or operation of the Franchised BHC Restaurant and the Franchised Business, except if caused by Franchisor's intentional misfeasance, gross negligence or material breach of any terms of, or Franchisor's obligations arising under, this Agreement.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the franchisee is generally required to indemnify the franchisor against losses arising from the franchisee's operation of the business. However, this obligation does not extend to situations where the losses are caused by Bhc's own actions.
Specifically, the franchisee is not required to indemnify Bhc if the losses arise from a "Proceeding" (legal action) concerning the franchisee's business operations, but only if such losses are caused by Bhc's intentional misfeasance, gross negligence, or material breach of the franchise agreement. This means that if Bhc itself is responsible for the issue that led to the losses, the franchisee is not obligated to cover Bhc's costs.
This provision is designed to protect franchisees from being held liable for issues that are the franchisor's fault. It ensures that Bhc cannot seek indemnification from the franchisee for problems caused by its own negligence or misconduct. Franchisees should carefully consider this clause, as it defines the boundaries of their financial responsibility in the event of legal claims related to their Bhc franchise.