Besides monetary penalties, what other remedies does Canine Dimensions have if an audit reveals discrepancies?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
visible to the public, posted on any vehicles owned or operated by Franchisee in connection with the Franchised Business.
18.3 Indemnification
Franchisee and each of the owners of any equity interest in Franchisee (the "Owners"), jointly and severally, will indemnify and defend Canine Dimensions Franchising, LLC (the "Indemnified Parties") against all Losses and Expenses arising from the operation or condition of any part of the Franchised Business or its site, the conduct of business, and any acts or omissions of Franchisee or its employees, agents, or contractors, including the collection or use of Customer Information; the infringement or alleged infringement by Franchisee or any Owners of any patent, trademark, copyright, or other proprietary right owned by third parties, unless arising from authorized use of the Marks in compliance with this Agreement; the violation or breach by Franchisee or any Owners of any applicable laws; Franchisee's failure to obtain and maintain required insurance coverage; libel, slander, or defamation of the Indemnified Parties, the System, or any other Franchisee by Franchisee or any Owners; the violation or breach by Franchisee or its Affiliates or Owners of any warranty, representation, agreement, or obligation in this Agreement or other agreements with the Indemnified Parties; acts, errors, or omissions of Franchisee, its Affiliates, Owners, and their respective owners, officers, employees, agents, and representatives in connection with the Franchised Business; any encumbrances, liens, assessments, levies, charges, demands for payment, taxes, or other liabilities imposed on Franchisor due to payments under this Agreement; and any claim that Franchisor and Franchisee are joint employers of Franchisee's employees or personnel.
- 18.3.1 Franchisee and Owners must give Franchisor immediate notice of any Action subject to indemnification. Franchisor may elect to control the defense and/or settlement of any such Action, without diminishing Franchisee's obligation to indemnify the Indemnified Parties.
- 18.3.2 Franchisor may consent to settlements or take remedial action to protect persons, property, or reputation if there are grounds to believe any acts or circumstances enumerated in this Section have occurred.
- 18.3.3 All Losses and Expenses incurred under this Section will be chargeable to and paid by Franchisee or Owners, regardless of any action or defense undertaken by Franchisor.
- 18.3.4 The Indemnified Parties do not assume liability for acts, errors, or omissions of those with whom Franchisee, its Affiliates, or Principals may contract.
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
Based on the 2025 Canine Dimensions Franchise Disclosure Document, in the event of discrepancies found during an audit, Canine Dimensions has the right to seek indemnification from the franchisee and the owners of any equity interest in the franchisee. This means the franchisee and owners may be required to cover all losses and expenses arising from the operation or condition of the franchised business.
The FDD specifies that "Losses and Expenses" include all direct and indirect costs, damages, liabilities, and expenses, including reasonable attorneys' fees, court costs, settlement amounts, judgments, fines, penalties, and other litigation expenses. These expenses must be incurred by the Indemnified Parties as a result of or in connection with any claim, demand, action, suit, or proceeding arising out of or relating to the operation of the Franchised Business, the conduct of Franchisee or its employees, agents, or contractors, or any breach of the Franchise Agreement by Franchisee or its Affiliates or Owners.
Furthermore, Canine Dimensions may elect to control the defense and/or settlement of any action related to indemnification, without reducing the franchisee's obligation to indemnify the Indemnified Parties. Canine Dimensions can also consent to settlements or take remedial action to protect persons, property, or reputation if there are grounds to believe any acts or circumstances have occurred that could lead to losses or expenses. All such losses and expenses will be chargeable to and paid by the franchisee or owners, regardless of any action or defense undertaken by Canine Dimensions.