Does Brain Balance assuming the defense of a claim against a franchisee diminish the Brain Balance franchisee's obligation to indemnify the company and hold it harmless?

According to Brain Balance's 2025 Franchise Disclosure Document, if Brain Balance elects to assume the defense and/or settlement of any action, suit, proceeding, claim, demand, inquiry, or investigation, this action does not diminish the franchisee's obligation to indemnify Brain Balance and hold it harmless. Brain Balance may choose to assume the defense, but is under no obligation to do so. Brain Balance will seek the advice and counsel of the franchisee and shall keep the franchisee informed with regard to any proposed or contemplated settlements.

This means that even if Brain Balance takes over the legal defense of a claim, the franchisee remains responsible for covering Brain Balance's losses, damages, and expenses related to the claim. This includes legal fees, settlement amounts, and any other costs incurred. The franchisee's duty to indemnify Brain Balance is not lessened or waived simply because Brain Balance decides to handle the legal proceedings.

This clause highlights a significant financial responsibility for Brain Balance franchisees. Franchisees should be aware that they could be required to cover potentially substantial costs, even when Brain Balance is managing the legal defense. It is advisable for prospective franchisees to fully understand the scope of this indemnification obligation and to consider obtaining adequate insurance coverage to protect themselves against potential claims.