Does Canine Dimensions Franchising, LLC have the right to control the defense of any action subject to indemnification?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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.
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, Canine Dimensions Franchising, LLC has the right to control the defense of any action subject to indemnification. Specifically, the franchisee must promptly notify Canine Dimensions of any action that may require indemnification. Canine Dimensions then has the option to take over the defense and/or settlement of that action.
Even if Canine Dimensions chooses to control the defense, the franchisee remains responsible for covering all associated losses and expenses. This includes all direct and indirect costs, damages, liabilities, and expenses, such as attorney's fees, court costs, settlement amounts, judgments, fines, penalties, and other litigation expenses. These costs must be paid by the franchisee, regardless of any action or defense undertaken by Canine Dimensions.
This arrangement means that while Canine Dimensions can dictate the legal strategy, the franchisee bears the financial risk. It is important for prospective franchisees to understand the scope of potential indemnification claims and to ensure they have adequate insurance coverage and financial resources to meet these obligations. Franchisees should seek legal counsel to fully understand their indemnification responsibilities under the Franchise Agreement.