What is the bank indemnified against in the Browns Chicken Indemnification Agreement?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Drawee Bank Please Note: There is an Indemnification Agreement below.
Indemnification Agreement
To the Bank Designated:
In consideration of your compliance with the request and authorization printed on the Authorization Form hereof, the Payee agrees with respect to any such action:
- (1) To Indemnify you and hold you harmless from any loss you may suffer as a consequence of your actions resulting from or in connection with the execution and issuance of any check, EFT, draft or order, whether or not genuine, purporting to be executed by the Payee and received by you in the regular course of business for the purpose of payment, including any costs or expenses reasonably incurred in connection herewith.
- (2) To Indemnify you for any loss arising in the event that any such check, EFT, draft or order shall be dishonored, whether with or without cause and whether intentionally or inadvertently.
- (3) To defend at our own cost any action which might be brought by any depositor or any other persons because of your actions taken pursuant to the foregoing request, or in any manner arising by reason of your participation.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to Browns Chicken's 2025 Franchise Disclosure Document, the Indemnification Agreement specifies the protections provided to the bank. The payee (likely Browns Chicken) agrees to indemnify the bank and hold it harmless from any losses the bank may incur as a consequence of actions resulting from or connected with the execution and issuance of any check, EFT, draft, or order. This protection applies whether or not the document is genuine, as long as it is received by the bank in the regular course of business for payment purposes.
This indemnification extends to covering any costs or expenses reasonably incurred by the bank in connection with these actions. Furthermore, the payee agrees to indemnify the bank for any loss arising if any such check, EFT, draft, or order is dishonored, regardless of the reason for the dishonor, whether intentional or inadvertent.
Finally, the payee is obligated to defend, at its own expense, any legal action brought by any depositor or other person against the bank due to actions taken by the bank following the authorization, or in any manner arising from the bank's participation. This comprehensive indemnification ensures the bank is protected from potential financial and legal repercussions related to processing payments for Browns Chicken.