Who is indemnified by the Developer Parties against losses, liabilities, legal costs, and other expenses related to demands, actions, arbitrations, or other proceedings involving Chatime?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
8 Indemnity and Limitation of Liability
8.1 Indemnity
- (1) Developer Parties indemnify Franchisor and each of its Affiliates (Chatime Group) against all:
- (a) Losses incurred by the Chatime Group;
- (b) Liabilities incurred by the Chatime Group; and
- (c) All Legal Costs and other Costs and expenses incurred by the Chatime Group in connection with a demand, action, arbitration or other proceeding (including mediation, compromise, out of court settlement or appeal),
arising directly or indirectly as a result of or in connection with:
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, the Developer Parties (comprising the Developer and Guarantor) provide indemnity to Chatime Group, which includes Chatime and its affiliates. This indemnity covers losses and liabilities incurred by the Chatime Group, as well as all legal costs and other expenses, in connection with any demand, action, arbitration, or other proceeding, including mediation, compromise, out-of-court settlement, or appeal. This protection extends to issues arising directly or indirectly as a result of or in connection with the agreement.
This means that if the Chatime Group faces any legal or financial repercussions due to the actions or inactions of the Developer Parties, the Developer Parties are responsible for covering those costs. This could include legal fees, settlement amounts, or any other expenses incurred by Chatime Group in defending against claims or resolving disputes.
For a prospective Chatime developer, this clause highlights the significant financial responsibility they undertake. They are not only responsible for their own legal and financial obligations but also for protecting Chatime Group from any losses or liabilities stemming from their operation. This underscores the importance of adhering to the franchise agreement and operating the development business responsibly to minimize the risk of triggering this indemnity clause.