Does the indemnification provided in section 16.2 of the Bhc franchise agreement survive the expiration or termination of the agreement?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
- (f) The term "Proceeding" means, refers to, and includes any threatened pending or completed suit, claim, demand, action, suit, arbitration, alternative dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether civil, criminal, administrative or investigative.
- (g) The indemnification provided in this section 16.2 is a continuing right and will survive the expiration or termination of this Agreement. The parties hereto further acknowledge and agree that they intend the indemnification provided in this section 16.2 to be interpreted and enforced in a manner providing the fullest extent of indemnification to the Indemnified Party now or hereafter permitted by law.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the indemnification provided in section 16.2 of the franchise agreement is a continuing right that survives the expiration or termination of the agreement. This means that even after the franchise agreement ends, the franchisee's obligation to protect, defend, and indemnify Bhc continues. This indemnification applies to both franchisees and master franchisees.
Specifically, the franchisee or master franchisee agrees to protect, defend, and indemnify Bhc and its owners, affiliates, officers, directors, employees, attorneys, and designees from any losses connected to any proceeding concerning the franchisee's or master franchisee's intentional tort or negligence related to the development, maintenance, or operation of the franchised Bhc Restaurant and business. This obligation continues unless the losses are caused by Bhc's intentional misfeasance, gross negligence, or material breach of the franchise agreement.
This survival clause ensures that Bhc is protected from potential liabilities arising from the franchisee's actions even after the franchise relationship has ended. The FDD emphasizes that the parties intend for this indemnification to be interpreted and enforced to the fullest extent permitted by law, providing the broadest possible protection to Bhc. Prospective franchisees should carefully consider the scope and implications of this indemnification clause, as it represents a long-term obligation that extends beyond the term of the franchise agreement.