What is the Bhc franchisee's responsibility regarding indemnification related to obligations under section 16.12?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
16.2 Indemnity.
- (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, section 16.2(a) outlines the franchisee's indemnification responsibilities. The franchisee and their Principal Equity Operators must jointly and severally protect, defend, and indemnify Bhc (the franchisor), including its owners, affiliates, officers, directors, employees, attorneys, and designees. This means the franchisee is responsible for holding Bhc harmless from any losses connected to any "Proceeding" (defined in section 16.2(f)).
The franchisee's indemnification obligation applies to proceedings concerning the franchisee's intentional tort or negligence, or that of their agents, servants, or representatives, relating to the development, maintenance, or operation of the franchised Bhc restaurant and business. However, this obligation does not apply if the losses are caused by Bhc's intentional misfeasance, gross negligence, or material breach of the franchise agreement.
In practical terms, this means a Bhc franchisee could be financially responsible for legal claims or other losses incurred by Bhc if those claims arise from the franchisee's (or their employees' or representatives') actions or negligence in running the business. It is important to note the franchisee is not responsible for Bhc's own negligence or breaches of the agreement. Franchisees should consult with a legal professional to fully understand their indemnification obligations and potential liabilities under the franchise agreement.