What is the Burneys Sweets More franchisee's obligation to indemnify the franchisor?
Burneys_Sweets_More Franchise · 2025 FDDAnswer from 2025 FDD Document
- (e) Pay All Sums Due.
Franchisee shall promptly pay all sums owed to Franchisor upon request.
Such sums shall include all damages, costs, losses, and expenses, including reasonable attorneys' fees, incurred by Franchisor as a result of the default and the termination.
Any outstanding obligations to Franchisor shall give rise to and remain, until paid in full, a lien in favor of Franchisor against any and all of the personal property, furnishings, equipment, signs, fixtures and inventory owned by Franchisee located on the Premises on the date this Agreement is terminated, expires, or does not renew.
Within fifteen (15) days of the date of expiration, termination, or non-renewal of this Agreement, Franchisee shall pay in full all of the creditors and suppliers to the Franchised Business.
- (f) Pay All Subsequent Amounts.
Franchisee shall promptly pay to Franchisor all damages, costs and expenses including reasonable attorneys' fees, incurred by Franchisor subsequent to the termination, expiration, or non-renewal of this Agreement in obtaining injunctive or other relief for the enforcement of any term, covenant or provision of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 50)
What This Means (2025 FDD)
Based on the 2025 Burneys Sweets More Franchise Disclosure Document, franchisees are obligated to pay sums owed to the franchisor upon request. These sums include damages, costs, losses, and expenses, including reasonable attorneys' fees, incurred by Burneys Sweets More due to the franchisee's default and the subsequent termination of the franchise agreement. This obligation extends to any costs incurred by Burneys Sweets More after termination in obtaining injunctive or other relief to enforce the franchise agreement.
Furthermore, any outstanding obligations create a lien in favor of Burneys Sweets More against the franchisee's personal property, furnishings, equipment, signs, fixtures, and inventory located at the premises on the date of termination, expiration, or non-renewal. The franchisee is also required to pay all creditors and suppliers to the franchised business within fifteen days of the termination, expiration, or non-renewal of the agreement.
In practical terms, this means a Burneys Sweets More franchisee could face significant financial liabilities beyond initial investments if they default on the agreement or if Burneys Sweets More needs to take legal action to enforce the agreement's terms. The lien on the franchisee's business assets provides Burneys Sweets More with a security interest, potentially allowing them to seize and liquidate those assets to cover outstanding debts. The requirement to pay business creditors post-termination also adds to the franchisee's financial responsibilities during and after the franchise term.