What standard of counsel is required when a Bombs Away franchisee defends an Indemnitee?
Bombs_Away Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall indemnify and defend (with counsel reasonably acceptable to Bombs Away Franchising) Bombs Away Franchising, its parent entities, subsidiaries and affiliates, and their respective owners, directors, officers, employees, agents, successors and assignees (collectively, "Indemnitees") against all Losses in any Action by or against Bombs Away Franchising and/or any Indemnitee directly or indirectly related to, or alleged to arise out of, the operation of the Business. Notwithstanding the foregoing, Franchisee shall not be obligated to indemnify an Indemnitee from Actions arising as a result of any Indemnitee's intentional misconduct or negligence. Any delay or failure by an Indemnitee to notify Franchisee of an Action shall not relieve Franchisee of its indemnity obligation except to the extent (if any) that such delay or failure materially prejudices Franchisee. Franchisee shall not settle an Action without the consent of the Indemnitee. This indemnity will continue in effect after this Agreement ends.
Source: Item 22 — CONTRACTS (FDD pages 35–36)
What This Means (2024 FDD)
According to Bombs Away's 2024 Franchise Disclosure Document, if a franchisee is required to defend Bombs Away Franchising or its related entities (Indemnitees) against any losses, the franchisee must use legal counsel that is reasonably acceptable to Bombs Away Franchising. This requirement is part of the broader indemnification agreement outlined in the franchise contract.
This means that a Bombs Away franchisee cannot simply hire any attorney they choose. Bombs Away Franchising has the right to approve the franchisee's choice of counsel, ensuring that the attorney has the necessary expertise and experience to adequately defend the Indemnitees. This provision protects Bombs Away Franchising's interests by ensuring competent legal representation in cases where the franchisee's actions could lead to liability for the franchisor.
The franchisee is responsible for all costs associated with the legal defense, including attorney fees. However, the franchisee is not obligated to indemnify an Indemnitee from actions arising as a result of any Indemnitee's intentional misconduct or negligence. The franchisee is also not allowed to settle any action without the consent of the Indemnitee. This indemnity agreement remains in effect even after the franchise agreement ends, highlighting the long-term responsibility of the franchisee.