Does the Brain Balance franchisee's indemnification obligation extend to losses not covered under deductible provisions of insurance coverage?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
19. INDEMNIFICATION
- (a) FRANCHISEE agrees at its cost to protect, defend, indemnify, and hold COMPANY, its parent if any, or any affiliate or subsidiary corporation, or assigns, and their respective directors, officers, shareholders, and members jointly and severally harmless from and against all claims, actions, proceedings, damages, costs, expenses, and other losses and liabilities, directly or indirectly incurred (including without limitation attorneys' and accountants' fees), in connection with any action, suit, proceeding, claim, demand, investigation, or formal or informal inquiry (regardless of whether the same is reduced to judgment) or any settlement thereof, as a result of, arising out of, or connected with the operation of the Franchised Business. This indemnity shall in no way be limited by the existence or non-existence of insurance coverage and shall also apply to claims, actions, proceedings, damages, costs, expenses, and other losses and liabilities not covered either under deductible provisions of such insurance coverage or in excess of insurance coverage required hereunder or otherwise not covered.
- (b) For the purpose of this Section 19.01, the indemnification 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, judgment, compensation for damages to COMPANY's reputation and goodwill, costs of or resulting from delays, financing, costs of advertising material and media time/space, and costs of changing, substituting or replacing same, and any and all expenses of refunds, compensation, public notices, and other such amounts incurred in connection with the matters described.
- (c) FRANCHISEE agrees to give COMPANY notice of any such action, lawsuit, proceeding, claim, demand, inquiry, or investigation. At the expense and risk of FRANCHISEE, COMPANY may elect to assume (but under no circumstance is obligated to undertake) the defense and/or settlement of any such action, suit, proceeding, claim, demand, inquiry, or investigation, provided that COMPANY will seek the advice and counsel of FRANCHISEE and shall keep FRANCHISEE informed with regard to any such proposed or
Source: Item 22 — CONTRACTS (FDD pages 70–72)
What This Means (2025 FDD)
According to Brain Balance's 2025 Franchise Disclosure Document, the franchisee's indemnification obligations extend to losses not covered by insurance. Specifically, the franchisee must protect, defend, indemnify, and hold Brain Balance harmless from claims, actions, proceedings, damages, costs, expenses, and other losses and liabilities connected with the operation of the franchised business.
This indemnification is not limited by the existence or non-existence of insurance coverage. It applies to claims, actions, proceedings, damages, costs, expenses, and other losses and liabilities not covered under deductible provisions of insurance, in excess of required insurance coverage, or otherwise not covered by insurance. This means a Brain Balance franchisee is responsible for all such financial impacts related to the business's operation, regardless of insurance.
The indemnification includes all losses, compensatory, exemplary, or punitive damages, fines, charges, costs, expenses, lost profits, attorneys' fees, experts' fees, court costs, settlement amounts, judgment, compensation for damages to Brain Balance's reputation and goodwill, costs of delays, financing, advertising material costs, and expenses of refunds and public notices. The franchisee must notify Brain Balance of any action, lawsuit, proceeding, claim, demand, inquiry, or investigation. Brain Balance may elect to assume the defense or settlement of any such action, but this does not diminish the franchisee's obligation to indemnify Brain Balance.