What costs and expenses are included in the indemnification provided by a Buns On Fire franchisee?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee irrevocably and unconditionally agrees to indemnify, defend and hold the Franchisor and its subsidiaries, affiliates, stockholders, directors, officers, employees, agents and assignees harmless against, and to reimburse them for, any loss, liability, taxes or damages (actual or consequential) and all reasonable costs and expenses of defending any claim brought against any of them or any action in which any of them is named as a party (including, without limitation, reasonable accountants', attorneys' and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses) which any of them may suffer, sustain or incur by reason of, arising from or in connection with Franchisee's ownership or operation of the Franchised Business, which is due solely to Franchisee's negligence, breach of contract or other civil wrongs, unless such loss, liability or damage is solely and directly due to the gross negligence or willful misconduct of the Franchisor (or any of its
affiliates, i.e., any company controlling, controlled by, or under common control with the Franchisor) in producing, handling or storing the proprietary food items sold to Franchisee (provided Franchisor shall have established that Franchisee inspected such proprietary food items in accordance with the procedures stated in the Confidential Operations Manual and could not have reasonably discovered the adulteration or other defect in such proprietary food items which was the case of such loss, liability or damage). Franchisee acknowledges and agrees that any action or inaction by any third party (e.g., an independent carrier) which is not an affiliate of the Franchisor in connection with handling or storing the Products shall not be attributable to or constitute negligence of the Franchisor.
Source: Item 23 — RECEIPTS (FDD pages 49–200)
What This Means (2025 FDD)
According to the 2025 Buns On Fire Franchise Disclosure Document, a franchisee agrees to indemnify, defend, and hold harmless Buns On Fire and its related parties. This means the franchisee will cover losses, liabilities, taxes, or damages, whether actual or consequential, along with all reasonable costs and expenses related to defending any claim. These expenses include reasonable accountants', attorneys', and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses, and travel and living expenses. This indemnification applies to claims arising from the franchisee's ownership or operation of the franchised business, specifically due to the franchisee's negligence, breach of contract, or other civil wrongs.
However, the franchisee is not responsible for these costs if the loss, liability, or damage is solely and directly due to the gross negligence or willful misconduct of Buns On Fire in producing, handling, or storing the proprietary food items sold to the franchisee. This exception is contingent on the franchisee having inspected the food items according to the procedures in the Confidential Operations Manual and not being reasonably able to discover the adulteration or defect that caused the loss, liability, or damage.
Furthermore, any actions or inactions by third parties not affiliated with Buns On Fire, such as independent carriers handling or storing the products, are not attributable to Buns On Fire's negligence. This clarifies that Buns On Fire is not responsible for the actions of unaffiliated third parties in the supply chain. This section outlines the specific circumstances under which a Buns On Fire franchisee is responsible for covering the costs and expenses incurred by the franchisor due to the franchisee's actions or the operation of their franchise.