Does the Checkers franchisee indemnify for their failure to perform any covenant of the agreement?
Checkers Franchise · 2025 FDDAnswer from 2025 FDD Document
You may not make any express or implied agreements, warranties, guarantees or representations or incur any debt in our name or on our behalf or represent that the
relationship of the parties hereto is anything other than that of independent contractors. We will not be obligated by or have any liability under any agreements made by you with any third party or for any representations made by you to any third party. We will not be obligated for any damages to any person or property arising directly or indirectly out of the operation of your business hereunder.
5.02 Indemnification.
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 t
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, its affiliates, and their respective directors, officers, employees, shareholders, members, agents, successors, and assigns. This indemnification covers losses and expenses incurred due to any litigation, adjudicatory procedure, claim, demand, investigation, or formal or informal inquiry, regardless of whether it results in a judgment. This also applies to any settlement.
In practical terms, this means that if a third party sues Checkers because of something the franchisee did or failed to do, the franchisee is responsible for covering Checkers' legal costs and any resulting damages. This includes not only direct costs but also any indirect losses Checkers might suffer. The obligation to indemnify holds 'to the fullest extent permitted by law'.
This type of indemnification clause is standard in franchise agreements. It protects the franchisor from liabilities arising from the franchisee's operations. However, it also places a significant financial burden on the franchisee, who could be responsible for substantial costs even if they are not directly at fault. Prospective franchisees should carefully consider this obligation and potentially seek legal advice to understand the full scope of their liability.