Is a Buona franchisee required to indemnify Buona, its officers, directors, employees, and agents against claims, costs, and attorneys' fees arising from the franchisee's business operations under the Development Agreement or any Franchise Agreement?
Buona Franchise · 2025 FDDAnswer from 2025 FDD Document
- 11.3 You understand and agree that nothing in this Agreement authorizes you to make any contract, agreement, warranty or representation on our behalf, or to incur any debt or other obligation in our name, and that we assume no liability for, nor shall we be deemed liable by reason of, any act or omission by you in the conduct of your business, or any claim or judgment arising therefrom. You shall indemnify and hold us, our
officers, directors, employees and agents harmless against any and all such claims directly or indirectly from, as a result of, or in connection with your business operations under this Agreement or under any Franchise Agreement, as well as the costs, including attorneys' fees, of defending against them.
Source: Item 22 — CONTRACTS (FDD page 78)
What This Means (2025 FDD)
According to Buona's 2025 Franchise Disclosure Document, franchisees are required to indemnify Buona, its officers, directors, employees, and agents. Specifically, under the Development Agreement, the franchisee must indemnify and hold harmless Buona, including its officers, directors, employees, and agents, from any claims, costs, and attorneys' fees that arise directly or indirectly from, or as a result of, the franchisee's business operations. This obligation extends to defending against such claims.
This means that if a third party brings a claim against Buona due to something related to the franchisee's business, the franchisee will be responsible for covering Buona's legal costs and any resulting damages. This indemnification obligation arises from the franchisee's business operations under the Development Agreement or any Franchise Agreement.
This type of indemnification clause is common in franchise agreements. It protects the franchisor from liabilities caused by the franchisee's actions. However, it also places a significant financial burden on the franchisee, who could be responsible for substantial costs even if the franchisor is partially at fault. Prospective franchisees should carefully consider this obligation and ensure they have adequate insurance coverage to mitigate this risk.