Does the Checkers franchisee indemnify for their breach of any representation or warranty?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
You agree to indemnify us, our Affiliates and our respective directors, officers, employees, shareholders, members, agents, successors and assigns (collectively "indemnitees"), and to hold the indemnitees harmless to the fullest extent permitted by law, from any and all losses and expenses (as defined below) incurred in connection with any litigation or other form of adjudicatory procedure, claim, demand, investigation, or formal or informal inquiry (regardless of whether it is reduced to judgment) or any settlement thereof which arises directly or indirectly from, or as a result of, a claim of a third party against any one or more of the indemnitees in connection with (i) your failure to perform or breach of any covenant, agreement, term or provision of this Agreement, (ii) your breach of any representation or warranty contained in this Agreement, and (iii) any allegedly unauthorized service or act rendered or performed in connection with this Agreement, (collectively "event") and regardless of whether it resulted from any strict or vicarious liability imposed by law on the indemnitees.
The foregoing indemnity shall apply even if it is determined that the indemnitees' negligence caused such loss, liability or expense, in whole or in part, provided, however, that this indemnity will not apply to any liability arising from a breach of this Agreement by the indemnitees or the gross negligence or willful acts of indemnitees (except to the extent that joint liability is involved, in which event the indemnification provided herein will extend to any finding of comparative or contributory negligence attributable to you).
Source: Item 23 — RECEIPTS (FDD pages 92–384)
What This Means (2025 FDD)
According to Checkers's 2025 Franchise Disclosure Document, franchisees are required to indemnify Checkers and its affiliates. This means the franchisee must protect Checkers from losses and expenses resulting from claims by third parties. This obligation extends to situations arising directly or indirectly from the franchisee's failure to adhere to the franchise agreement, including breaches of any representation or warranty made within the agreement. The indemnification covers litigation, claims, demands, investigations, and settlements, regardless of whether they proceed to judgment.
The indemnity obligation applies even if Checkers's negligence contributed to the loss, liability, or expense. However, the franchisee is not responsible for liabilities arising from Checkers's breach of the agreement, gross negligence, or willful acts, unless joint liability is involved. In cases of joint liability, the franchisee's indemnification extends to any comparative or contributory negligence attributed to them.
This indemnification clause is a standard practice in franchising, designed to protect the franchisor from liabilities caused by the franchisee's actions. However, prospective Checkers franchisees should carefully review this section with legal counsel to fully understand the scope of their indemnification obligations and potential financial exposure. They should also be aware of the conditions under which this indemnity does not apply, particularly concerning Checkers's own conduct.