Under what circumstances does a Bhc franchisee indemnify the franchisor?
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, a franchisee must indemnify the franchisor under specific circumstances related to the operation of the franchised business. The franchisee and their Principal Equity Operators agree to protect, defend, and indemnify Bhc, including its owners, affiliates, officers, directors, employees, attorneys, and designees. This means the franchisee is responsible for covering losses, damages, or expenses incurred by Bhc due to certain actions or proceedings.
The franchisee's obligation to indemnify Bhc arises from any "Proceeding" connected to the franchisee's intentional tort or negligence, or the intentional tort or negligence of the franchisee's agents, servants, or representatives. This applies to activities related to the development, maintenance, or operation of the franchised Bhc restaurant and business. In essence, if the franchisee's actions (or the actions of their employees or representatives) lead to legal claims or liabilities due to intentional misconduct or carelessness, the franchisee is responsible for protecting Bhc from any resulting losses.
However, there is an exception to this indemnification requirement. The franchisee is not required to indemnify Bhc if the losses are caused by Bhc's own intentional misfeasance, gross negligence, or material breach of the franchise agreement. This provision ensures that Bhc cannot hold the franchisee responsible for issues arising from Bhc's own misconduct or failure to meet its obligations under the agreement. This type of clause is common in franchise agreements to allocate risk and liability between the franchisor and franchisee.