What is the exception to the Byrider licensee's obligation to indemnify Licensor?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
Licensee shall indemnify and hold Licensor harmless against claim, action, or cause of action which arises from the use of the Licensed System by Licensee under this Agreement including, but not limited to, attorneys fees actually incurred, costs, expenses, damages, judgments, awards, and penalties, provided that the same does not arise solely from Licensor's negligence or willful misconduct.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, a Byrider licensee is generally required to indemnify and hold the licensor harmless from any claims arising from the use of the Licensed System. However, this obligation does not apply if the claim, action, or cause of action arises solely from the licensor's negligence or willful misconduct. This means that Byrider franchisees are protected from having to cover the licensor's liabilities in situations where the licensor is directly at fault due to their own negligence or intentional wrongdoing.
This exception is important for prospective Byrider franchisees because it clarifies the limits of their liability. While franchisees are responsible for their own actions and use of the Licensed System, they are not expected to bear the financial burden of the licensor's mistakes or intentional misconduct. This provides a degree of protection for the franchisee's investment and business operations.
In practical terms, if a customer sues a Byrider franchisee due to a problem with the retail installment sales and security contracts created using the Licensed System, the franchisee would typically be responsible for covering the associated costs, including attorney fees, damages, and judgments. However, if the issue stemmed from the licensor's negligence in maintaining the system or providing inaccurate data, the franchisee would not be obligated to indemnify the licensor. This shifts the responsibility back to Byrider in cases where they are directly responsible for the problem.
It is important for prospective franchisees to understand the scope of this indemnification clause and its exception. They should carefully review the franchise agreement and consult with legal counsel to fully understand their rights and obligations. Additionally, franchisees should maintain thorough records of their use of the Licensed System and any communications with the licensor to protect themselves in the event of a dispute.