What is the Body20 franchisee's obligation to defend the Indemnified Parties against third-party claims?
Body20 Franchise · 2025 FDDAnswer from 2025 FDD Document
s any and all losses, expenses, obligations, liabilities, damages (actual, consequential, or otherwise), and reasonable defense costs that an Indemnified Party incurs, including accountants', arbitrators', mediators', attorneys', and expert witness fees, costs of investigation and proof of facts, court costs, travel and living expenses, and other expenses of litigation, arbitration, or alternative dispute resolution, regardless of whether litigation, arbitration, or alternative dispute resolution is commenced.
- 11.2 Indemnification Procedure. You agree to defend the Indemnified Parties against any and all claims asserted or inquiries made (formally or informally), or legal actions, investigations, or other proceedings brought, by a third party and directly or indirectly arising out of or relating to any matter described in Subsection 11.1(i) through (iv) above (collectively, "Proceedings"), including those alleging the Indemnified Party's negligence, gross negligence, willful misconduct and/or willful wrongful omissions. Each Indemnified Party may at your expense defend and otherwise respond to and address any claim asserted or inquiry made, or Proceeding brought, that is subject to this Section 11 (instead of having you defend it as required above), and agree to settlements or take any other remedial, corrective, or other actions, for all of which
defense and response costs and other Losses you are solely responsible, subject to Section 11.3 (Willful Misconduct or Gross Negligence). An Indemnified Party need not seek recovery from any insurer or other third party, or otherwise mitigate its Losses, in order to maintain and recover fully a claim against you, and you agree that a failure to pursue a recovery or mitigate a Loss will not reduce or alter the amounts that an Indemnified Party may recover from you under this Section 11. Your obligations in this Section 11 will survive the expiration or termination of this Agreement.
11.3 Willful Misconduct or Gross Negligence. Despite Section 11.1, you have no obligation to indemnify or hold harmless an Indemnified Party for, and we will reimburse you for, any Losses (including costs of defending any Proceeding under Section 11.2) to the extent they are determined in a final, unappealable ruling issued by a court or arbitrator with competent jurisdiction to have been caused solely and directly by the Indemnified Party's willful misconduct or gross negligence, so long as the claim to which those Losses relate is not asserted on the basis of theories of vicarious liability (including agency, apparent agency, or employment) or our failure to compel you to comply with this Agreement. However, nothing in this Section 11.3 limits your obligation to defend us and the other Indemnified Parties under Section 11.2.
Section 12 Noncompete Covenants.
- 12.1 During Term. You acknowledge that you will receive valuable, specialized training and confidential information regarding the manufacturing, operational, sales, promotional, and marketing methods of us and the Brand.
Source: Item 23 — RECEIPT (FDD pages 74–251)
What This Means (2025 FDD)
According to the 2025 Body20 Franchise Disclosure Document, franchisees are generally required to defend the Indemnified Parties (which include Body20, its affiliates, and their respective owners, directors, officers, employees, agents, representatives, successors, and assignees) against third-party claims. This obligation arises from any claims or inquiries, formal or informal, and legal actions, investigations, or proceedings brought by a third party that directly or indirectly relate to the studio's operation, the franchisee's business under the agreement, the franchisee's breach of the agreement, or the franchisee's noncompliance with laws and regulations. These claims can include allegations of the Indemnified Party's negligence, gross negligence, willful misconduct, and/or willful wrongful omissions.
The FDD specifies that Body20 may choose to defend itself at the franchisee's expense instead of having the franchisee defend it. Body20 can also agree to settlements or take other corrective actions, with the franchisee responsible for covering all associated defense and response costs and other losses. This obligation to defend and indemnify survives the expiration or termination of the Franchise Agreement.
However, the franchisee has no obligation to indemnify or hold harmless an Indemnified Party for losses caused solely and directly by the Indemnified Party's willful misconduct or gross negligence, as determined by a final, unappealable ruling from a competent court or arbitrator, provided the claim is not based on vicarious liability theories. Even in such cases, the franchisee's obligation to defend Body20 and other Indemnified Parties remains in effect. This indemnification clause is modified in Washington state such that the franchisee has no obligation to indemnify, reimburse, defend, or hold harmless the franchisor or any other indemnified party for losses or liabilities to the extent that they are caused by the indemnified party's negligence, willful misconduct, strict liability, or fraud.