What is Camp Margaritaville's obligation regarding legal defense if an indemnity claim arises?
Camp_Margaritaville Franchise · 2025 FDDAnswer from 2025 FDD Document
Each of the Parties hereto shall indemnify and hold harmless the other Party ("Indemnifying Party") and its Affiliates, and their respective shareholders, members, partners, officers, directors, employees, agents and representatives (individually, an "Indemnitee," and collectively, the "Indemnitees") from and against any and all third-party claims, orders, damages, liabilities, costs and expenses, including commercially reasonable attorneys' fees, caused by any negligent or more culpable acts or omissions by an Indemnifying Party or its Affiliates. Each Party hereto shall promptly notify the other Party of any claim or litigation to which the indemnity set forth in this paragraph applies. Each Party agrees to defend all actions to which such indemnity applies and to conduct the defense thereof at its expense and by qualified counsel, which counsel shall be commercially reasonably satisfactory to the Indemnitee. These indemnity obligations shall survive the termination or expiration of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 72–406)
What This Means (2025 FDD)
According to the 2025 Camp Margaritaville FDD, if a third-party claim arises for which indemnification applies, the party responsible for providing indemnity must defend the actions. This defense must be conducted at the indemnifying party's expense, using qualified counsel that is commercially reasonably satisfactory to the party being indemnified.
Specifically, each party (Franchisor and Franchisee) agrees to indemnify and hold harmless the other party and their affiliates from third-party claims, orders, damages, liabilities, costs, and expenses, including commercially reasonable attorneys' fees. This applies to situations caused by negligent or culpable acts or omissions by the Indemnifying Party or its Affiliates. The indemnified party must promptly notify the other party of any claim or litigation to which the indemnity applies.
This obligation survives the termination or expiration of the Franchise Agreement, meaning that even after the agreement ends, the responsibility to defend and indemnify remains in effect for claims that arose during the term of the agreement. This is a standard practice in franchising to protect both parties from potential liabilities stemming from their respective actions or omissions during the franchise relationship.