Am I required to indemnify Bombs Away for legal actions caused by Bombs Away's misconduct or negligence?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Currently $600, plus | On demand | Payable only if we conduct an in-person | |
| our out-of-pocket | evaluation of your business because of a | ||
| costs | governmental report, customer complaint | ||
| or other customer feedback, or your | |||
| default or non-compliance with any | |||
| system specification. | |||
| We may cure your non-compliance on | |||
| your behalf (for example, if you do not | |||
| have required insurance, we may purchase | |||
| insurance for you), and you will owe our | |||
| costs plus a 10% administrative fee. | |||
| $7,500 plus any | Payable if you sell your business. | ||
| broker fees and other | |||
| out-of-pocket costs | |||
| we incur | |||
| An amount equal to | |||
| royalty fees and | |||
| marketing fund | |||
| contributions for the | |||
| lesser of (i) 2 years | |||
| or (ii) the remaining | |||
| weeks of the | |||
| franchise term. | |||
| Our costs and losses | You must indemnify and defend (with | ||
| from any legal | counsel reasonably acceptable to us) us | ||
| action related to the | and our affiliates against all losses in any | ||
| operation of your | action by or against us related to, or | ||
| franchise | alleged to arise out of, the operation of | ||
| your franchise (unless caused by our | |||
| misconduct or negligence). | |||
| Our attorney fees, | In any legal proceeding (including | ||
| court costs, and | arbitration), the losing party must pay the | ||
| other expenses of a | prevailing party’s attorney fees, court | ||
| legal proceeding, if | costs and other expenses. | ||
| we are the prevailing | |||
| party |
Source: Item 6 — OTHER FEES (FDD pages 9–13)
What This Means (2024 FDD)
According to the 2024 Bombs Away Franchise Disclosure Document, franchisees are required to indemnify Bombs Away against losses from legal actions related to the operation of their franchise. However, this requirement does not extend to situations where the legal action is a result of Bombs Away's own misconduct or negligence. This means that while franchisees are responsible for the legal consequences arising from their own actions or the actions of their employees, Bombs Away will bear the responsibility for legal issues stemming from their own errors or omissions.
This condition protects franchisees from being held liable for Bombs Away's mistakes, which is a standard practice in franchising. Franchisees should ensure they understand the scope of their operational responsibilities and maintain adequate insurance coverage to protect against potential liabilities. It is also important to document all interactions and directives received from Bombs Away to establish a clear record in case of disputes.
Furthermore, the FDD states that in any legal proceeding, including arbitration, the losing party is responsible for covering the prevailing party's attorney fees, court costs, and other related expenses. This provision underscores the importance of carefully assessing the merits of any legal claim before pursuing it, as the financial consequences of losing a legal battle could be significant. Franchisees should seek legal counsel to evaluate their position and understand the potential costs involved in any legal action.