Under the Carls Jr. TR Development Agreement, what parties are included in the definition of "Indemnitees" that the Developer must indemnify?
Carls_Jr Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer and all guarantors of Developer's obligations under this Agreement shall, at all times, indemnify, defend (with counsel reasonably acceptable to CJR), and hold harmless (to the fullest extent permitted by law) CJR and its parents and affiliates, and their respective predecessors, successors, assigns, past and present stockholders, directors, managers, officers, members, employees, agents and representatives (collectively "Indemnitees") from and against all "losses and expenses" (as defined below) incurred in connection with any action, suit, proceeding, claim, demand, investigation, inquiry (formal or informal), judgment or appeal thereof by or against Indemnitees or any settlement thereof (whether or not a formal proceeding or action had been instituted), arising out of or resulting from or connected with Developer's activities under this Agreement, excluding the gross negligence or willful misconduct of CJR. Developer promptly shall give CJR written notice of any such action, suit, proceeding, claim, demand, inquiry or investigation filed or instituted against Developer and, upon request, shall furnish CJR with copies of any documents from such matters as CJR may request.
Source: Item 23 — RECEIPTS (FDD pages 76–364)
What This Means (2025 FDD)
According to the 2025 Carls Jr. Franchise Disclosure Document, the TR Development Agreement requires the developer to indemnify a group referred to as "Indemnitees." This group includes Carls Jr. and its parents and affiliates, as well as their respective predecessors, successors, assigns, past and present stockholders, directors, managers, officers, members, employees, agents, and representatives.
This means the developer is responsible for defending and protecting these "Indemnitees" from losses and expenses related to the developer's activities under the Development Agreement. This obligation extends to any action, suit, proceeding, claim, demand, investigation, inquiry, judgment, or appeal involving the "Indemnitees." The developer must also provide Carls Jr. with written notice of any such legal actions or claims against them.
However, the developer is not responsible for indemnifying the "Indemnitees" if the losses and expenses are due to the gross negligence or willful misconduct of Carls Jr. itself. This indemnification clause is a standard provision in franchise agreements, shifting certain risks and liabilities from the franchisor to the franchisee.