Does the Browns Chicken indemnity cover costs and expenses reasonably incurred in connection with the execution and issuance of any check, EFT, draft or order?
Browns_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
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 the 2025 Browns Chicken Franchise Disclosure Document, Browns Chicken's Payee Indemnification Agreement does cover costs and expenses related to financial transactions. Specifically, Browns Chicken agrees to indemnify the bank designated by the franchisee and hold it harmless from any loss suffered as a consequence of actions resulting from or in connection with the execution and issuance of any check, EFT, draft, or order, whether or not genuine. This includes any costs or expenses reasonably incurred in connection with these transactions.
This agreement protects the bank from losses due to actions taken in processing payments to Browns Chicken from the franchisee's account. It extends to checks, EFTs, drafts, or orders, regardless of their authenticity, provided they are received in the regular course of business for payment purposes. The agreement also covers losses if any such payment method is dishonored, whether intentionally or inadvertently.
Furthermore, Browns Chicken commits to defending any legal action brought against the bank by depositors or other parties due to the bank's actions taken in accordance with the authorization form. This defense will be at Browns Chicken's own cost. This indemnification agreement is a standard practice to protect banks when processing payments on behalf of businesses, ensuring they are not held liable for issues arising from those transactions.