Are Bhc franchisees relieved of their indemnity obligations if they procure the required insurance?

According to Bhc's 2025 Franchise Disclosure Document, a franchisee's obligation to obtain and maintain insurance does not relieve them of liability under the indemnity provisions outlined in section 16.2 of the franchise agreement. Bhc requires franchisees to secure specific insurance coverage and to name Bhc as an additional insured on those policies.

This means that even if a Bhc franchisee fulfills all insurance requirements, they are still responsible for protecting, defending, and holding Bhc harmless from any losses, damages, costs, expenses, or fees resulting from legal proceedings related to the franchisee's or their agents' intentional tort, or negligence in the development, maintenance, or operation of the franchised restaurant. The franchisee's insurance coverage will be primary to Bhc's, and Bhc's insurance will be excess of the franchisee's.

This clause highlights that insurance coverage and indemnity obligations are treated as separate and independent responsibilities within the Bhc franchise agreement. Franchisees cannot assume that having the required insurance will automatically shield them from all potential liabilities. Franchisees need to understand that they are responsible for their actions, and must indemnify Bhc against certain claims, regardless of their insurance coverage. This is a common practice in franchising, as franchisors seek to protect themselves from liabilities arising from the operations of their franchisees.