Under what circumstances will Bhc Franchisor indemnify 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 responsible for protecting, defending, and indemnifying Bhc. Specifically, the franchisee must hold harmless Bhc and its owners, affiliates, officers, directors, employees, attorneys, and designees from any losses connected to any proceeding concerning the franchisee's intentional tort or negligence. This also applies to the intentional tort or negligence of the franchisee's agents, servants, or representatives. This obligation extends to matters relating to the franchisee's development, maintenance, or operation of the franchised Bhc Restaurant and the franchised business.
However, there is an exception: Bhc will not be indemnified if the losses are caused by Bhc's intentional misfeasance, gross negligence, or material breach of the franchise agreement. This means that if Bhc's own actions or failures lead to the losses, the franchisee is not responsible for indemnifying them.
This section clarifies that the franchisee bears significant responsibility for any legal or financial repercussions arising from their operation of the Bhc franchise, unless Bhc itself is at fault through intentional misconduct, gross negligence, or a major breach of the agreement. Prospective franchisees should carefully consider this indemnity clause and potentially seek legal counsel to fully understand their obligations and potential liabilities.