What parties are included in the Bhc franchisor's indemnity from the franchisee?
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 required to indemnify the franchisor and certain related parties under specific circumstances. Specifically, the franchisee and their Principal Equity Operators must protect, defend, and indemnify Bhc, including all of Bhc's past, present, and future owners, affiliates, officers, directors, employees, attorneys, and designees. This means the franchisee is responsible for covering losses, legal costs, and damages incurred by these parties.
The franchisee's obligation to indemnify these parties arises from any Proceeding concerning the franchisee's intentional tort or negligence, or the intentional tort or negligence of the franchisee's agents, servants, or representatives. This indemnification relates to the franchisee's development, maintenance, or operation of the franchised Bhc restaurant and the franchised business. However, there is an exception: the franchisee is not required to indemnify Bhc if the losses are caused by Bhc's intentional misfeasance, gross negligence, or material breach of the franchise agreement.
This indemnity clause places a significant responsibility on the Bhc franchisee. It means that if the franchisee's actions (or the actions of their employees or representatives) lead to legal claims or losses, the franchisee will be responsible for covering the costs incurred by Bhc and its related parties. A prospective franchisee should carefully consider this obligation and ensure they have adequate insurance coverage and risk management practices in place. It is also important to understand the specific definition of "Proceeding" and "Losses" as defined in the franchise agreement to fully grasp the scope of this indemnity.