Does the expiration or termination of the Card My Yard agreement release me from accrued liabilities?
Card_My_Yard Franchise · 2025 FDDAnswer from 2025 FDD Document
- (5) Promptly pay all sums owing to us and our Affiliates, and all damages, costs and expenses, including reasonable attorneys' fees and costs, incurred by us as a result of any default by you or in connection with obtaining injunctive or other relief for the enforcement of any provisions of this Article XIX., which obligation shall give rise to and remain a lien in favor of us against any and all of your assets, until such obligations are paid in full.
XVI. INDEMNIFICATION
You agree to indemnify, defend and hold harmless us, our Affiliates, and our and their respective shareholders, directors, officers, employees, agents, successors and assignees (the "Indemnified Parties") against, and to reimburse any one or more of the Indemnified Parties for, any and all claims, and liabilities directly or indirectly arising out of the operation of the Card My Yard business or your breach of this Agreement, without limitation and without regard to the cause or causes thereof or the negligence (whether such negligence be sole, joint or concurrent, or active or passive) or strict liability of us or any other party or parties in connection therewith. Notwithstanding the foregoing, this indemnity shall not apply to any liability arising from our gross negligence or willful misconduct, except to the extent that joint liability is involved, in which event the indemnification provided herein shall extend to any finding of comparative or contributory negligence attributable to you, your Owners, officers, directors, employees, independent contractors or Affiliates. For purposes of this indemnification, "claims" includes all obligations, damages (actual, consequential, exemplary or other) and costs reasonably incurred in the defense of any claim against any of the Indemnified Parties, including, without limitation, accountants', mediators', arbitrators', attorneys' and expert witness fees, costs of investigation and proof of facts, court costs, other expenses of litigation, arbitration or alternative dispute resolution and travel and living expenses. We have the right to defend any such claim against us. This indemnity will continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 84–259)
What This Means (2025 FDD)
According to Card My Yard's 2025 Franchise Disclosure Document, the termination or expiration of the franchise agreement does not release a franchisee from accrued liabilities. Specifically, franchisees are obligated to promptly pay all sums owed to Card My Yard and its affiliates, including damages, costs, and expenses, such as reasonable attorney's fees, resulting from any default by the franchisee. This obligation creates a lien in favor of Card My Yard against any and all of the franchisee's assets until all obligations are paid in full.
Furthermore, the franchisee's duty to indemnify Card My Yard continues even after the termination or expiration of the agreement. This means that franchisees remain responsible for defending and holding Card My Yard harmless from any claims and liabilities arising from the operation of the Card My Yard business or any breach of the agreement. This indemnification extends to claims, obligations, damages, and costs, including legal fees, incurred in defending against any claim.
These clauses ensure that Card My Yard can recover any outstanding debts or costs associated with a franchisee's actions, even after the franchise agreement has ended. This is a standard practice in franchising, designed to protect the franchisor from potential financial losses due to franchisee misconduct or negligence. Prospective franchisees should be aware that their financial responsibilities to Card My Yard do not simply disappear upon termination or expiration of the agreement.