Under the Buildingstars franchise agreement, are the obligations of the Indemnitors 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 23 — RECEIPT (FDD pages 43–217)
What This Means (2025 FDD)
According to Buildingstars's 2025 Franchise Disclosure Document, the obligations of the Indemnitors under the franchise agreement are joint and several. This means that each Indemnitor is individually liable for the full amount of any debt or obligation. Buildingstars can pursue any one Indemnitor for the entire amount owed, regardless of whether other Indemnitors exist or their ability to pay.
For a prospective Buildingstars franchisee, this has significant implications. The term Indemnitor includes the franchisee, their owners, employees, agents, officers, directors, members, managers, parents, subsidiaries, affiliates, successors, and assigns. If the franchisee operates as a partnership or corporation, the joint and several liability extends to the individual partners or shareholders and their spouses. This means that Buildingstars can seek recourse from any of these individuals or entities for the full amount of any liability, regardless of their individual contribution to the issue.
This type of clause is common in franchise agreements to protect the franchisor from losses resulting from the franchisee's actions or inactions. However, it places a significant burden on the Indemnitors, as they could be held responsible for the entire debt even if other parties are more directly responsible. Franchisees should carefully consider the risks associated with joint and several liability and seek legal advice to fully understand their obligations and potential exposure.
It is also important to note that this indemnification is limited to the extent permitted by law. Buildingstars cannot be indemnified for its own negligence if such indemnification is prohibited by law. This provides some protection for the franchisee, but the franchisee still bears the primary responsibility for their own actions and the actions of those associated with their business.