Does Byrider have the right to control litigation against the franchisee if Byrider is providing indemnification?
Byrider Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. The Company shall indemnify and hold the Franchisee harmless from and against any and all claims, and the cost of defending such claims, caused by the gross negligence or willful misconduct of the Company or arising from any mandatory specification, standard or procedure contained in the Manual that is determined to be unlawful, provided that the Franchisee shall have given the Company timely notice of such claim or proceeding and is not in default under this Agreement and, provided further, that the Company shall have the right to participate in and, to the extent the Company deems necessary, to control any such litigation or proceeding.
Source: Item 23 — Receipts (FDD pages 88–335)
What This Means (2025 FDD)
According to Byrider's 2025 Franchise Disclosure Document, Byrider retains the right to participate in and control litigation or proceedings if they deem it necessary, provided they are indemnifying the franchisee. This control is applicable when the claim is caused by Byrider's gross negligence or willful misconduct, or arises from any mandatory specification, standard, or procedure in the Manual that is determined to be unlawful.
However, this right is contingent on the franchisee providing timely notice of the claim or proceeding and not being in default under the Franchise Agreement. This means that if a franchisee fails to promptly inform Byrider of a claim or is in breach of the agreement, Byrider's obligation to indemnify and potentially control the litigation may be voided.
This clause is important for prospective franchisees as it outlines the conditions under which Byrider will provide legal and financial protection. It also highlights the franchisee's responsibility to maintain compliance with the agreement and promptly communicate any legal issues to Byrider to ensure they can benefit from this indemnification and potential litigation control.