Are judgments included in the definition of 'Losses and Expenses' under the Canine Dimensions franchise agreement?
Canine_Dimensions Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.3.5 "Losses and Expenses" means all direct and indirect costs, damages, liabilities, and expenses, including but not limited to, reasonable attorneys' fees, court costs, settlement amounts, judgments, fines, penalties, and other litigation expenses, 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 this Agreement by Franchisee or its Affiliates or Owners.
- 18.3.6 "Indemnified Parties" means Franchisor, Franchisor's successor, assigns, and Affiliates (including but not limited to Canine Dimensions Franchising, LLC) and the respective officers, directors, shareholders, agents, representatives, independent contractors, servants, and employees of each of them.
Source: Item 22 — CONTRACTS (FDD page 36)
What This Means (2025 FDD)
According to Canine Dimensions' 2025 Franchise Disclosure Document, the definition of "Losses and Expenses" explicitly includes judgments. This definition is crucial because it outlines the financial responsibilities a franchisee may bear under the indemnification clause of the franchise agreement.
Specifically, "Losses and Expenses" encompasses all direct and indirect costs, damages, liabilities, and expenses. This broad category includes, but is not limited to, reasonable attorneys' fees, court costs, settlement amounts, judgments, fines, penalties, and other litigation expenses. These expenses must be incurred by the Indemnified Parties, which include Canine Dimensions Franchising, LLC, its successors, assigns, affiliates, and their respective officers, directors, shareholders, agents, representatives, independent contractors, servants, and employees.
This means that if Canine Dimensions or any of its related parties incur such costs due to a claim, demand, action, suit, or proceeding arising out of the franchisee's operation, conduct, or any breach of the agreement, the franchisee is responsible for covering these expenses, including any judgments. This indemnification obligation highlights a significant potential financial risk for Canine Dimensions franchisees, as they could be liable for substantial costs beyond their initial investment and ongoing operating expenses.