Under what circumstances is a Care Plus Medical Ucc franchisee required to indemnify the Indemnitees?
Care_Plus_Medical_Ucc Franchise · 2024 FDDAnswer from 2024 FDD Document
ARTICLE 16. INDEMNITY
- 16.1 Indemnity. Franchisee shall indemnify and defend (with counsel reasonably acceptable to Care Plus Medical UCC) Care Plus Medical UCC, its parent entities, subsidiaries and affiliates, and their respective owners, directors, officers, employees, agents, successors and assignees (collectively, "Indemnitees") against all Losses in any Action by or against Care Plus Medical UCC and/or any Indemnitee directly or indirectly related to, or alleged to arise out of, the operation of the Business. Notwithstanding the foregoing, Franchisee shall not be obligated to indemnify an Indemnitee from Actions arising as a result of any Indemnitee's intentional misconduct or negligence. Any delay or failure by an Indemnitee to notify Franchisee of an Action shall not relieve Franchisee of its indemnity obligation except to the extent (if any) that such delay or failure materially prejudices Franchisee. Franchisee shall not settle an Action without the consent of the Indemnitee. This indemnity will continue in effect after this Agreement ends.
- 16.2 Assumption. An Indemnitee may elect to assume the defense of any Action subject to this indemnification, and control all aspects of defending the Action, including negotiations and settlement, at Franchisee's expense. Such an undertaking shall not diminish Franchisee's obligation to indemnify the Indemnitees.
Source: Item 22 — CONTRACTS (FDD page 41)
What This Means (2024 FDD)
According to Care Plus Medical Ucc's 2024 Franchise Disclosure Document, a franchisee is generally required to indemnify and defend Care Plus Medical UCC and its related entities and personnel (referred to as "Indemnitees") against losses from any action related to the operation of the Care Plus Medical Ucc business. This includes covering legal costs and damages arising from claims or lawsuits. The franchisee's obligation includes defending Care Plus Medical Ucc with legal counsel that is reasonably acceptable to them.
However, the franchisee is not required to indemnify an Indemnitee if the action arises from the Indemnitee's intentional misconduct or negligence. Additionally, any delay or failure by an Indemnitee to promptly notify the franchisee of an action does not relieve the franchisee of their obligation to indemnify, unless the delay materially prejudices the franchisee's ability to defend the action. The franchisee is not allowed to settle any action without the Indemnitee's consent.
Care Plus Medical Ucc has the option to assume the defense of any action subject to indemnification at the franchisee's expense, which includes controlling all aspects of the defense, such as negotiations and settlement. This assumption of defense by Care Plus Medical Ucc does not reduce the franchisee's obligation to indemnify the Indemnitees. This indemnification obligation remains in effect even after the franchise agreement ends, meaning that the franchisee could still be liable for actions that occurred during the term of the agreement.