What does the Big Apple Bagels franchisee agree to indemnify the franchisor against?
Big_Apple_Bagels Franchise · 2025 FDDAnswer from 2025 FDD Document
- d. Indemnification. Franchisee agrees to indemnify Franchisor and its subsidiaries, Affiliates, stockholders, directors, officers, employees, agents, successors, and assignees against and to reimburse them for all obligations, damages, and taxes set forth in this Agreement for which they are held liable and for all costs reasonably incurred by them in the defense of any claims brought against them or in any action in which they are named as a party, including without limitation, reasonable attorneys' and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses, and travel and living expenses as a result of or related in any way to the operation of the Store, except to the extent caused by Franchisor's negligent or willful action or failure to act. Franchisor has the right to defend any such claim against it. Franchisee shall also indemnify and hold Franchisor and its officers, directors, employees and agents harmless from any and all claims, demands or liabilities arising from the offer or sale of securities, whether asserted by a purchaser of any security or by a governmental agency. Franchisor has the right to defend any such claims.
- e. Survival. The indemnities and assumptions of liabilities and obligations herein shall continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 86–87)
What This Means (2025 FDD)
According to Big Apple Bagels' 2025 Franchise Disclosure Document, the franchisee agrees to indemnify the franchisor and its related parties. This means the franchisee will protect Big Apple Bagels from certain liabilities and costs. Specifically, the franchisee will cover obligations, damages, and taxes outlined in the Franchise Agreement for which Big Apple Bagels is held responsible. This includes all costs reasonably incurred in defending against claims or actions where they are named as a party. These costs include reasonable attorneys' and expert witness fees, costs of investigation and proving facts, court costs, other litigation expenses, and travel and living expenses. This indemnification applies to issues related to the operation of the store. However, the franchisee is not responsible for costs caused by Big Apple Bagels' negligent or willful actions or failures to act.
In addition, the Big Apple Bagels franchisee must also indemnify and hold harmless Big Apple Bagels and its officers, directors, employees, and agents from any claims, demands, or liabilities arising from the offer or sale of securities, whether the claim is made by a purchaser of the security or a governmental agency. Big Apple Bagels retains the right to defend against any such claim.
This indemnification clause remains in effect even after the Franchise Agreement expires or is terminated. Indemnification clauses are standard in franchise agreements, shifting certain risks and liabilities from the franchisor to the franchisee, who is running the day-to-day operations of the business. Prospective Big Apple Bagels franchisees should carefully review this section with legal counsel to understand the full scope of their responsibilities and potential financial exposure.