What losses and expenses are included in the indemnification clause for a Boulder Designs franchisee?
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 indemnification clause covers a wide range of potential losses and expenses. This means a franchisee could be responsible for covering these costs if a claim arises.
The FDD specifies that "losses and expenses" include all losses, compensatory, exemplary or punitive damages, fines, charges, costs, expenses, lost profits, attorneys' fees, experts' fees, court costs, settlement amounts, compensation for damages to Boulder Designs' reputation and goodwill, costs of or resulting from delays, costs related to purchase order preparation (measurements, color and fabric representation), financing, advertising material costs, and costs associated with recalls, refunds, public notices, and other related amounts. This broad definition suggests that franchisees bear significant financial responsibility for various liabilities that may arise from their business operations.
Furthermore, the franchisee is responsible for indemnifying Boulder Designs against claims arising from the Franchise Agreement or the operation of the franchised business. This includes costs or expenses Boulder Designs incurs due to projects completed by the franchisee under the National Headstone Program, including repairs or warranty work. However, the franchisee is not responsible for losses or expenses arising from Boulder Designs' gross negligence or willful acts.
This extensive indemnification clause is a critical point for prospective franchisees to consider. It highlights the importance of understanding the risks associated with operating a Boulder Designs franchise and the potential financial burden of covering a wide array of losses and expenses. Franchisees should seek legal counsel to fully understand their obligations under this clause.