Is Chatime indemnified for any incomplete, inaccurate, or misleading warranty, promise, or representation made by Developer Parties?
Chatime Franchise · 2025 FDDAnswer from 2025 FDD Document
- (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:
- (h) Any warranty, promise, or representation made by Franchisee Parties or any employee, agent, or other person acting on behalf of Franchisee Parties being incomplete, inaccurate, or misleading.
Source: Item 23 — Receipts (FDD pages 58–262)
What This Means (2025 FDD)
According to Chatime's 2025 Franchise Disclosure Document, Developer Parties are required to indemnify Chatime and its affiliates (Chatime Group) against losses, liabilities, legal costs, and other expenses arising from various circumstances. This includes any warranty, promise, or representation made by Developer Parties or anyone acting on their behalf that is incomplete, inaccurate, or misleading. This means that if a Developer Party makes a false or misleading statement that causes Chatime to incur costs or losses, the Developer Party is responsible for covering those expenses.
This indemnity extends to losses and liabilities incurred by the Chatime Group and covers all legal costs associated with demands, actions, arbitrations, or other proceedings. The indemnity is triggered by a breach of the agreement, injury to persons or property on the premises, franchisee taxes or liabilities, negligent acts or omissions, and, as mentioned, any incomplete, inaccurate, or misleading statements made by the Developer Parties.
This clause protects Chatime from potential misrepresentations made by Developer Parties during the course of their business dealings. It ensures that Chatime can seek compensation from the Developer Parties for any damages or losses resulting from such misrepresentations. This type of clause is common in franchise agreements to allocate risk and protect the franchisor's interests.
It is important to note that this indemnity is in addition to Chatime's other rights and remedies under the agreement and at law. The franchisor's rights, including the right to be indemnified, are not affected by the termination of the franchise agreement or any related agreements, or by the franchisor accepting the franchisee's repudiation of the agreement.