Does the Buildingstars franchise agreement specify that the indemnification obligations of the Indemnitors are joint and several?
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' 2025 Franchise Disclosure Document, the obligations of the Indemnitors, which include the franchisee and their owners, employees, agents, officers, directors, members, managers, parents, subsidiaries, affiliates, successors, and assigns, are specified as joint and several. This means that each Indemnitor is individually liable for the full amount of any damages, losses, or liabilities, and Buildingstars can pursue any one or all of them to recover the full amount owed.
This has significant implications for prospective Buildingstars franchisees. If there are multiple Indemnitors (e.g., multiple owners of the franchise), each one could be held responsible for the entire debt or liability, regardless of their individual contribution to the issue. This is a standard practice in franchising to protect the franchisor from losses resulting from the franchisee's actions or omissions.
Furthermore, the indemnification extends to a wide range of potential issues, including acts or omissions related to the business, breaches of the franchise agreement, and the costs of enforcing the indemnification provision. However, the indemnification does not cover the Indemnified Party's own negligence if such indemnification is prohibited by law. Franchisees should be aware of the breadth of this indemnification clause and seek legal counsel to fully understand their potential liabilities under the agreement.
In summary, the joint and several liability clause in the Buildingstars franchise agreement places a significant responsibility on the franchisee and related parties to ensure compliance with the agreement and to avoid any actions that could lead to damages or liabilities for which they could be held fully responsible.