Who are the 'Indemnified Parties' that a Carvel franchisee must defend, indemnify, and hold harmless?
Carvel Franchise · 2025 FDDAnswer from 2025 FDD Document
You must defend, indemnify, and hold harmless us and our affiliates, our and their permitted successors and assigns, and each of our and their respective direct and indirect owners, directors, officers, managers, employees, agents, attorneys, and representatives (collectively, the "Indemnified Parties") from and against all Losses (defined below), which any of the Indemnified Parties may suffer, sustain, or incur as a result of a claim asserted or inquiry made formally or informally, or a legal action, investigation, or other proceeding brought, by a third party and directly or indirectly arising out of or relating to: (i) the operation of the Franchised Business; (ii) the business you conduct under this Agreement; (iii) your breach of this Agreement; (iv) your noncompliance or alleged noncompliance with any Law; or (v) any allegation that we or another Indemnified Party is a joint employer or otherwise responsible for your acts or omissions relating to your employees. "Losses" include all obligations, liabilities, damages (actual, consequential, or otherwise), and reasonable defense costs that any Indemnified Party incurs.
Defense costs include arbitrators', attorneys', and expert witness fees, costs of investigation and proof of facts, court costs, travel and living expenses, and other expenses of litigation, arbitration, or alternative dispute resolution, regardless of whether litigation, arbitration, or alternative dispute resolution is commenced.
Source: Item 23 — Receipts (FDD pages 100–353)
What This Means (2025 FDD)
According to Carvel's 2025 Franchise Disclosure Document, a franchisee is obligated to defend, indemnify, and hold harmless specific parties, collectively known as the "Indemnified Parties". These parties include Carvel itself, its affiliates, and their permitted successors and assigns. The definition extends to each of their respective direct and indirect owners, directors, officers, managers, employees, agents, attorneys, and representatives. This means that the franchisee's indemnification obligation potentially covers a wide range of individuals and entities associated with the Carvel brand.
The franchisee's obligation arises from claims or inquiries made by a third party that are related to the operation of the franchised business. This includes the business conducted under the Franchise Agreement, any breach of the agreement by the franchisee, noncompliance with laws, or allegations that Carvel or another Indemnified Party is a joint employer or otherwise responsible for the franchisee's acts or omissions relating to their employees. The term "Losses" encompasses all obligations, liabilities, damages (both actual and consequential), and reasonable defense costs incurred by any Indemnified Party.
Defense costs covered by the franchisee include fees for arbitrators, attorneys, and expert witnesses, as well as costs for investigation, proof of facts, court costs, travel, living expenses, and other expenses related to litigation, arbitration, or alternative dispute resolution. This obligation to defend is triggered regardless of whether a formal legal proceeding is initiated. However, the franchisee is entitled to assume control of the defense of any claim, provided they notify the Indemnified Party within 15 days and accept full responsibility for any resulting losses.
It's important to note that Carvel will promptly notify the franchisee of any claim that may lead to an indemnity claim. The franchisee is not required to indemnify an Indemnified Party for losses caused solely and directly by the Indemnified Party's gross negligence, willful misconduct, or willful wrongful omissions, as determined by a final ruling from a competent court or arbitrator. This indemnification obligation remains in effect even after the Franchise Agreement expires or terminates, and the Indemnified Party is not required to seek recovery from insurers or mitigate losses before making a claim against the franchisee.