Does the Browns Chicken franchisee's indemnification obligation survive the termination of the franchise agreement?
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.
Source: Item 22 — Contracts (FDD page 43)
What This Means (2025 FDD)
According to the 2025 Browns Chicken Franchise Disclosure Document, the franchisee's obligation to indemnify Browns Chicken survives the termination or expiration of the franchise agreement. This means that even after the franchise agreement ends, the franchisee remains responsible for covering certain losses, costs, liabilities, damages, claims, and expenses related to specific events.
The franchisee's indemnification responsibilities include issues arising from (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. This obligation extends to covering allegations of negligence by Browns Chicken and its affiliates, including their officers, employees, and agents, and includes reasonable attorneys' fees.
Browns Chicken retains the right to control the defense and response to any action related to these indemnification obligations, at the franchisee's expense. Furthermore, Browns Chicken is not required to seek recovery from third parties or mitigate its losses before making a claim for indemnification against the franchisee. This clause ensures that Browns Chicken can seek full recovery from the franchisee without needing to pursue other avenues of compensation first. This is a significant obligation for the franchisee, as it extends beyond the active term of the franchise agreement and could potentially involve substantial financial responsibility even after the business has ceased operating under the Browns Chicken brand.