Is there a specific note that refers to the indemnification fee for a Burros Fries franchise?
Burros_Fries Franchise · 2024 FDDAnswer from 2024 FDD Document
[Item 6: OTHER FEES]
Note 4: You must protect, defend, indemnify and hold us harmless against any claims, lawsuits or losses arising out of your operation of the Franchised Business. If you default under the agreement and we engage an attorney for collection or enforcement, you must pay all our damages, legal fees and costs to the extent permitted by law. Indemnification costs are imposed only by us and collected only by us. Indemnification costs may vary based on the claims, lawsuits, and losses that we incur arising out of your operation of the Business (Franchise Agreement Section 18).
| Audit Expenses | Cost of Audit Fees plus interest at 18% per annum (1.5% per month) up to the maximum interest rate allowed by law. | Ten days after receipt of audit report. | Payable to us only if you understate Gross Revenues by 2% or more. We expect the cost to be between $3,500- $6,500 unless your financial records are not well kept. |
|---|---|---|---|
| Costs and Attorney’s Fees | Will vary under circumstances. | As Incurred. | Payable as incurred by us in obtaining injunctive relief or the enforcement of any item of the Franchise Agreement. |
| Indemnification | Will vary under circumstances. | On Demand. | As Incurred; See Note 4. |
Source: Item 6 — OTHER FEES (FDD pages 12–16)
What This Means (2024 FDD)
According to the 2024 Burros Fries Franchise Disclosure Document, Note 4 in Item 6 refers to indemnification. The franchisee must protect, defend, indemnify, and hold Burros Fries harmless against any claims, lawsuits, or losses arising out of the operation of the franchised business. If the franchisee defaults under the agreement and Burros Fries engages an attorney for collection or enforcement, the franchisee must pay all damages, legal fees, and costs to the extent permitted by law. Indemnification costs are imposed and collected only by Burros Fries and may vary based on the claims, lawsuits, and losses incurred arising out of the franchisee's operation of the business.
Item 6 also includes a table that mentions indemnification fees. The amount of the indemnification fee will vary under the circumstances and is due on demand. The fees are incurred as they happen; see Note 4 for additional details.
In essence, as a Burros Fries franchisee, you are responsible for covering any legal or financial liabilities that arise from your business operations. This could include lawsuits, claims, or losses. The amount you would have to pay for indemnification is not fixed but depends on the specific situation. It is important to operate your Burros Fries franchise in a way that minimizes risk and complies with all applicable laws and regulations to avoid incurring these costs.