Is the Brain Balance franchisee's obligation to indemnify limited by the existence or non-existence of insurance coverage?
Brain_Balance Franchise · 2025 FDDAnswer from 2025 FDD Document
(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.
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 obligation to indemnify Brain Balance is not limited by the existence or non-existence of insurance coverage. The franchisee is responsible for protecting, defending, and indemnifying Brain Balance against all claims, actions, proceedings, damages, costs, expenses, and other losses related to the operation of the franchised business. This includes attorney's and accountant's fees.
This indemnification requirement applies regardless of whether insurance coverage exists. It extends to claims, actions, proceedings, damages, costs, expenses, and other losses and liabilities not covered by insurance, including those within deductible provisions or exceeding the required coverage.
This means that even if a Brain Balance franchisee has insurance, they may still be liable for costs and damages if the insurance does not fully cover a claim. The franchisee's financial responsibility is comprehensive and not capped by their insurance policy limits. This could potentially expose the franchisee to significant financial risk depending on the nature and extent of any claims or liabilities arising from the operation of the Brain Balance center.