Does the Checkers franchisee's indemnification obligation extend to informal inquiries?
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 have an obligation to indemnify Checkers and its affiliates. This obligation extends to any losses and expenses incurred due to any litigation, adjudicatory procedure, claim, demand, investigation, or formal or informal inquiry. This applies regardless of whether a judgment is made or a settlement occurs, and if the claim arises directly or indirectly from a third party.
The franchisee's indemnification responsibilities include situations connected to the franchisee's failure to perform or breach any part of the Franchise Agreement, breach of any representation or warranty within the agreement, or any allegedly unauthorized service or act related to the agreement. This indemnification extends to Checkers' affiliates, directors, officers, employees, shareholders, members, agents, successors, and assigns.
This indemnification requirement applies even if Checkers' negligence caused the loss, liability, or expense. However, it does not apply to liability arising from Checkers' breach of the agreement, gross negligence, or willful acts, unless joint liability is involved. In cases of joint liability, the indemnification covers any comparative or contributory negligence attributed to the franchisee. This means a Checkers franchisee could be responsible for covering Checkers' legal costs and other expenses even in situations where Checkers was partly at fault, provided the franchisee's actions contributed to the issue.