What costs are included in the indemnification obligation of a Buildingstars franchisee?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
To the fullest extent permitted by law, FRANCHISEE, for itself and its owners, employees, agents, officers, directors, members, managers, parents, subsidiaries, affiliates, successors and assigns ("Indemnitors"), agree, at their sole cost and expense, to indemnify, defend and hold harmless, and to reimburse on demand BUILDINGSTARS and all entities related to BUILDINGSTARS and their respective shareholders, directors, officers, members, managers, employees agents, partners, attorneys, licensees, affiliates successors and assigns ("Indemnified Parties") for and against any and all damages, losses, liabilities, bodily injury, property damage, obligations, penalties, fines, claims, litigation, demands, defenses, judgments, suit proceedings, administrative orders, consent agreements, costs, disbursements or expenses of any kind or any nature whatsoever, including without limitation, reasonable attorneys' and expert fees and disbursements arising out of or related to or in any way arising out of the acts or omissions of any Indemnitor, including without limitation (i) any act or omission, negligent or otherwise, of the Indemnitors or anyone directly or indirectly employed by them or anyone for whom they may be
liable relative to the Business; (ii) any breach by the Indemnitors of any term or provision of this Agreement; and (iii) the cost, including, but not limited to reasonable attorney's fees, of enforcing this indemnification provision. The obligations of Indemnitors are joint and several.
This indemnification shall not be construed to indemnify an Indemnified Party to the extent such indemnification is prohibited by law, including, an indemnification of any Indemnified Party from its own negligence, if prohibited by law. To the extent indemnification of any party hereunder would be prohibited by law, this provision shall not apply to such party with respect to such otherwise indemnifiable act but shall continue to be effective as to all other parties with respect to whom indemnification is not prohibited by applicable law.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the franchisee's indemnification obligation includes a wide range of potential costs. The franchisee agrees to indemnify, defend, and hold harmless Buildingstars against any damages, losses, liabilities, bodily injury, property damage, obligations, penalties, fines, claims, litigation, demands, defenses, judgments, suit proceedings, administrative orders, consent agreements, costs, disbursements, or expenses. This extends to all entities related to Buildingstars and their respective stakeholders.
Specifically, the indemnification covers costs arising from the franchisee's acts or omissions, including negligence, any breach of the Franchise Agreement, and the costs of enforcing the indemnification provision itself, including reasonable attorneys' and expert fees. This means that if a customer, employee, or any other party brings a claim against Buildingstars due to something the franchisee did or failed to do, the franchisee is responsible for covering Buildingstars's legal defense and any resulting financial losses.
However, the indemnification is not absolute. It does not extend to situations where it is prohibited by law, such as indemnifying Buildingstars for its own negligence, if such indemnification is legally disallowed. This provision is intended to protect Buildingstars from liabilities caused by the franchisee's actions while ensuring that the franchisee is not held responsible for Buildingstars's own misconduct, to the extent such protection is allowed by law. The obligations of the franchisees are joint and several.
Prospective franchisees should carefully consider the scope of this indemnification clause and understand the potential financial exposure it creates. It is advisable to consult with a legal professional to fully grasp the implications and to assess the risks associated with this obligation.