Under what circumstances is a Casiola franchisee NOT required to indemnify the Franchisor Indemnified Parties?
Casiola Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee and each Owner shall indemnify, defend through counsel acceptable to Franchisor, and hold Franchisor, Franchisor's affiliates, and their respective officers, directors, shareholders, members, owners, partners, agents, representatives, independent contractors, employees, assigns and successors (the "Franchisor Indemnified Parties") harmless from all losses, expenses, claims, causes of action, lawsuits, liabilities, taxes, costs, demands, proceedings, investigations, hearings, and/or damages arising out of, or relating to, the Franchised Business (including, without limitation, the ownership and operation of the Franchised Business), unless such loss, expense, claim, cause of action, lawsuit, liability, tax, cost, demand, proceeding, or damage is solely due to Franchisor's gross negligence, and Franchisee shall pay all of the Franchisor Indemnified Parties' reasonable costs, fees and expenses of defending any such claim, cause of action, lawsuit, demand, proceeding, investigation, and/or hearing brought against any of the Franchisor Indemnified Parties or any such claim, cause of action, lawsuit, demand, proceeding, investigation, and/or hearing in which any of the Franchisor Indemnified Parties is named as a party, including, without limitation, reasonable accountant fees, attorney fees, and expert witness fees, court costs, deposition fees, travel expenses and other litigation expenses.
Source: Item 23 — RECEIPTS (FDD pages 47–209)
What This Means (2024 FDD)
According to the 2024 Casiola Franchise Disclosure Document, a franchisee is generally required to indemnify Franchisor Indemnified Parties from losses, expenses, claims, lawsuits, liabilities, taxes, costs, demands, proceedings, investigations, hearings, and/or damages arising out of or relating to the Franchised Business.
However, the franchisee is not required to indemnify the Franchisor Indemnified Parties if the loss, expense, claim, cause of action, lawsuit, liability, tax, cost, demand, proceeding, or damage is solely due to Casiola's gross negligence. This means that if Casiola's direct actions or failures to act with reasonable care are the sole cause of the damages, the franchisee is not responsible for covering Casiola's losses or legal expenses.
This condition protects the franchisee from liability in situations where Casiola's own actions are the primary cause of the issue. However, the franchisee still bears the responsibility to indemnify Casiola for issues arising from the operation of the franchise itself, unless Casiola's gross negligence is the sole cause. This is a fairly standard clause in franchise agreements, intended to allocate risk appropriately between the franchisor and franchisee.