Who has the right to control the defense of any action against Brown related to the Browns Chicken franchise?
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 Browns Chicken's 2025 Franchise Disclosure Document, Browns Chicken retains the right to control the defense and response to any legal action against them related to the franchise. This control is exercised through counsel of their choosing, but the franchisee is responsible for covering the expenses associated with this defense. This arrangement does not reduce the franchisee's obligation to Browns Chicken.
Browns Chicken is not obligated to seek recovery from third parties or mitigate losses before claiming indemnification from the franchisee. This means Browns Chicken can pursue full compensation from the franchisee without first exhausting other potential avenues of recovery. The franchisee's obligation to indemnify Browns Chicken survives the termination or expiration of the franchise agreement.
However, Browns Chicken also agrees to indemnify the franchisee against obligations or liabilities for damages attributable to Browns Chicken's agreements, representations, warranties, negligence, or willful actions. Browns Chicken has the right to participate in and control any litigation that might result in liability or expense to the franchisee, provided that Browns Chicken deems it necessary. This indemnification from Browns Chicken does not apply if the franchisee contributed to the harm.