Does the Checkers franchisee indemnify for claims arising from their breach of any 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' 2025 Franchise Disclosure Document, franchisees are required to indemnify Checkers and its affiliates. Specifically, the franchisee must protect Checkers from losses or expenses resulting from third-party claims related to the franchisee's failure to adhere to the franchise agreement, any breach of representations or warranties within the agreement, or any unauthorized service or act performed under the agreement. This indemnification extends to litigation, claims, demands, investigations, and settlements.
The indemnification clause in the Checkers franchise agreement applies even if Checkers' negligence contributed to the loss, liability, or expense. However, the franchisee is not responsible for liabilities arising from Checkers' breach of the agreement or from Checkers' gross negligence or willful acts. If joint liability is involved, the franchisee's indemnification covers comparative or contributory negligence attributed to them.
This means a Checkers franchisee could be financially responsible for legal costs and damages if their actions lead to a claim against Checkers, even if Checkers was partially at fault. Franchisees should be aware of this broad indemnification clause and ensure they operate their business in compliance with the franchise agreement to minimize the risk of such claims. It is important to note that specific state laws, such as those in Maryland and Minnesota, may place limits on the scope and enforceability of these types of indemnification provisions to protect franchisees.