What is included in the definition of 'losses and expenses' regarding damages to Boulder Designs' reputation and goodwill?
Boulder_Designs Franchise · 2025 FDDAnswer from 2025 FDD Document
For the purpose of this Section, the term "losses and expenses" shall be deemed to include all losses, compensatory, exemplary or punitive damages, fines, charges, costs, expenses, lost profits, attorneys' fees, experts' fees, court costs, settlement amounts, judgments, compensation for damages to our reputation and goodwill, costs of or resulting from delays, costs of or resulting from franchisees duties in the preparation
of the purchase order regarding franchisees taking accurate measurements and representing the customer's desire for both color and type of fabric, financing, costs of advertising material and media time/space, and costs of changing, substituting, or replacing same, and any and all expenses of recall, refunds, compensation, public notices, and other such amounts incurred in connection with the matters described. Franchisee agrees to give us notice of any such action, suit, proceeding, claim, demand, inquiry, or investigation. The foregoing indemnification shall not apply to losses or expenses arising from our gross negligence or willful acts.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
According to Boulder Designs' 2025 Franchise Disclosure Document, the term "losses and expenses" includes compensation for damages to Boulder Designs' reputation and goodwill. This definition is used when determining what a franchisee is responsible for covering in the event of certain liabilities or breaches of contract.
Specifically, the definition of "losses and expenses" is broad, encompassing various types of financial impacts beyond just direct costs. It extends to compensatory, exemplary, or punitive damages, fines, charges, costs, expenses, lost profits, attorneys' fees, experts' fees, court costs, settlement amounts, costs resulting from delays, costs related to franchisees' duties in preparing purchase orders, financing, advertising material costs, and expenses related to recalls, refunds, public notices, and other related amounts.
This means that if a franchisee's actions or inactions lead to damage to Boulder Designs' reputation or goodwill, the franchisee could be held financially responsible for a wide range of costs associated with rectifying the situation. However, the agreement specifies that the indemnification does not apply to losses or expenses arising from Boulder Designs' gross negligence or willful acts. This attempts to balance the responsibilities between the franchisor and franchisee, ensuring the franchisee is not liable for issues caused directly by Boulder Designs itself.