Under what circumstances does the indemnification clause in the Buildingstars franchise agreement NOT apply?
Buildingstars Franchise · 2025 FDDAnswer from 2025 FDD Document
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 indemnification clause in the franchise agreement has specific limitations. The franchisee's obligation to indemnify Buildingstars does not apply to the extent that such indemnification is prohibited by law. This includes indemnification of Buildingstars from its own negligence, if such an indemnification is legally prohibited.
This means that while franchisees generally agree to protect Buildingstars from various damages, losses, and liabilities arising from the franchisee's actions or omissions, this protection has boundaries. If a law prevents Buildingstars from being indemnified for its own negligent acts, then the franchisee's indemnification obligation will not extend to those specific acts. This ensures that Buildingstars cannot use the indemnification clause to shield itself from liability for its own misconduct in jurisdictions where such protection is illegal.
In practical terms, a prospective Buildingstars franchisee should be aware that the indemnification clause is not absolute. It is subject to legal limitations that may vary depending on the jurisdiction. Franchisees should consult with legal counsel to understand the specific scope and limitations of the indemnification clause in their particular circumstances, especially concerning the laws governing negligence and indemnification in their area. This understanding is crucial for assessing the potential liabilities and risks associated with operating a Buildingstars franchise.