Does the Browns Chicken franchisee's indemnification of Brown include allegations of negligence by Brown?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee will, and hereby does, indemnify and defend Brown and its Affiliates and their respective officers, directors, owners, agents, representatives, employees, successors and assigns, from and against all losses, costs, liabilities, damages, claims, and expenses of every kind, including allegations of negligence by Brown and its Affiliates and their officers, employees, and agents, to the fullest extent permitted by Applicable Law, and including reasonable attorneys' fees, arising out of, resulting from or related to: (i) the unauthorized use of the Trademarks; (ii) the violation of Applicable Law; and (iii) the construction, renovation, upgrading, alteration, remodeling, repair, operation, ownership and use of the BROWN Store. Franchisee must promptly give notice to Brown of any action, suit, proceeding, claim, demand, inquiry, or investigation related to the foregoing. Brown will have the right, through counsel of its choice, at Franchisee's expense, to control the defense and response to any such action, and such undertaking by Brown will not, in any manner, diminish Franchisee's obligations to Brown. Under no circumstances will Brown or a person indemnified be required to seek recovery from third parties or mitigate its losses in order to maintain a claim for indemnification against Franchisee under this Agreement, and the failure to pursue such recovery or mitigate a loss will in no way reduce the amounts recoverable from Franchisee by a person indemnified. Franchisee's obligations under this Section will survive the termination or expiration of this Agreement.
Brown agrees to indemnify Franchisee against and to reimburse Franchisee for any obligations or liability for damages attributable to agreements, representations or warranties of Brown (except such agreements as Brown shall make on behalf of Franchisee in developing the Store, if any), or caused by the negligence or willful action of Brown, and for costs (as hereinabove defined) reasonably incurred by Franchisee in the defense of any such claim brought against it or in any action in which Franchisee is named as a party, provided that Brown shall have the right to participate in and, to the extent Brown deems necessary, to control, any litigation or proceeding which might result in liability of or expense to Franchisee subject to such indemnification. Brown's indemnification shall not apply in the event Franchisee contributed to the harm.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to the 2025 Browns Chicken Franchise Disclosure Document, the franchisee's indemnification of Brown's Chicken does include allegations of negligence by Brown's Chicken and its affiliates, officers, employees, and agents. The franchisee agrees to indemnify and defend Brown's Chicken against all losses, costs, liabilities, damages, claims, and expenses, including reasonable attorneys' fees, arising from various factors. These factors include the unauthorized use of trademarks, violation of applicable law, and the construction, renovation, operation, ownership, and use of the Browns Chicken store. This indemnification is to the fullest extent permitted by applicable law.
This means that as a Browns Chicken franchisee, you could be held responsible for covering Brown's Chicken legal costs and damages even if the claim involves allegations of negligence on the part of Brown's Chicken. This obligation extends to Brown's Chicken affiliates, officers, employees, and agents. The franchisee is required to promptly notify Brown's Chicken of any related legal actions or claims, and Brown's Chicken has the right to control the defense and response to such actions at the franchisee's expense.
Browns Chicken is not obligated to seek recovery from third parties or mitigate its losses before claiming indemnification from the franchisee. This places a significant financial responsibility on the franchisee. However, Brown's Chicken also agrees to indemnify the franchisee against liabilities or damages caused by Brown's Chicken's negligence or willful actions, provided the franchisee did not contribute to the harm. This creates a reciprocal indemnification arrangement, although the franchisee's obligation appears broader, covering even allegations of negligence by Browns Chicken.