Are the indemnification obligations of the Indemnitors under the Buildingstars franchise agreement joint, several, or both?
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 indemnification obligations of the Indemnitors are 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.
For a prospective Buildingstars franchisee, this has significant implications. As an Indemnitor, the franchisee is responsible for protecting Buildingstars from any claims or losses arising from the franchisee's actions or omissions related to the business. The joint and several liability clause means that if there are multiple Indemnitors (e.g., partners in the franchise), Buildingstars can seek the entire amount of damages from any one of them, regardless of their individual contribution to the cause of the damages. This could expose a franchisee to substantial financial risk if other Indemnitors are unable to pay their share.
It is important to note that this indemnification is not absolute. It does not extend to situations where indemnification is prohibited by law, such as indemnifying Buildingstars for its own negligence, if such indemnification is prohibited by law. However, the provision remains effective for all other parties and situations where indemnification is legally permissible. Franchisees should carefully review the scope of the indemnification clause with legal counsel to fully understand their potential liabilities and obligations under the Buildingstars franchise agreement.