Under what circumstances does a Buns On Fire franchisee agree to indemnify the franchisor?
Buns_On_Fire Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition to the requirements of this Article, Franchisee must promptly ("promptly" being herein defined as within fifteen (15) days of receipt of an offer to buy) give Franchisor additional written notice whenever Franchisee has received a bona fide offer from a third party to buy Franchisee's business franchised hereunder. Franchisee must also give Franchisor written notice simultaneously with any offer to sell the Franchised Business made by, for, or on behalf of Franchisee. The purpose of this Subsection is to enable Franchisor to comply with any applicable state or federal franchise disclosure law or rules. Franchisee agrees to indemnify and hold Franchisor harmless for Franchisee's failure to comply with this Subsection.
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 must indemnify and hold the franchisor harmless if the franchisee fails to comply with the requirements regarding the sale of their franchised business. Specifically, the franchisee is required to provide written notice to Buns On Fire when they receive a bona fide offer from a third party to buy the franchise or when the franchisee makes an offer to sell the franchise. This notice must be given promptly, which is defined as within fifteen days of receipt of an offer to buy. The purpose of this notification is to enable Buns On Fire to comply with any applicable state or federal franchise disclosure laws or rules.
This indemnification clause means that if a Buns On Fire franchisee fails to notify the franchisor about an offer to buy or sell the franchise as required, and this failure results in legal or financial repercussions for the franchisor, the franchisee is responsible for covering those costs. This could include legal fees, fines, or other damages incurred by Buns On Fire as a result of the franchisee's non-compliance.
This type of clause is relatively common in franchise agreements, as franchisors need to maintain control over who becomes a franchisee and ensure compliance with franchise laws. It is important for prospective Buns On Fire franchisees to understand this obligation and ensure they adhere to the notification requirements when considering selling their franchise to avoid potential liabilities.