Under what circumstances does the Checkers franchisee's indemnification obligation arise?
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 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, a franchisee is obligated to indemnify Checkers and its affiliates under specific circumstances. The franchisee must protect Checkers from losses and expenses resulting from third-party claims related to the franchisee's actions. This indemnification extends to Checkers' directors, officers, employees, shareholders, members, agents, successors, and assigns.
The franchisee's indemnification obligation arises directly or indirectly from a third-party claim against Checkers due to (i) the franchisee's failure to perform or breach of any term in the Franchise Agreement, (ii) the franchisee's breach of any representation or warranty in the Agreement, and (iii) any allegedly unauthorized service or act performed in connection with the Agreement. This means that if a customer, employee, or other third party sues Checkers because of something the franchisee did or failed to do, the franchisee is responsible for covering Checkers' losses and expenses.
This indemnification 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 Checkers' gross negligence or willful acts, unless joint liability is involved, in which case the franchisee will cover comparative or contributory negligence attributable to them. This clause ensures Checkers is protected from liabilities caused by the franchisee's actions while also providing some protection to the franchisee from Checkers' own misconduct.