Does the Checkersrallys agreement specify if the indemnification covers informal inquiries?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
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 Checkersrallys's 2025 Franchise Disclosure Document, the indemnification agreement does cover informal inquiries. Checkersrallys franchisees agree to indemnify Checkersrallys, its affiliates, and their respective directors, officers, employees, shareholders, members, agents, successors, and assigns from losses and expenses incurred in connection with any litigation, claim, demand, investigation, or formal or informal inquiry. This indemnification applies regardless of whether the inquiry is reduced to judgment.
This means that if a third party makes a claim against Checkersrallys related to the franchisee's actions or breach of the franchise agreement, the franchisee may be responsible for covering Checkersrallys's losses and expenses. These expenses can include damages, fines, attorney's fees, and costs associated with investigating and defending against the claims. The indemnity extends to situations where Checkersrallys's negligence caused the loss, unless the liability arises from Checkersrallys's breach of the agreement or their gross negligence or willful acts.
Checkersrallys agrees to provide the franchisee with reasonable notice of any event that may require indemnification and may elect to direct the defense, including selecting counsel. However, any settlement is subject to the franchisee's consent, which cannot be unreasonably withheld or delayed. This section of the agreement remains in effect even after the expiration or termination of the franchise agreement, meaning potential liabilities could extend beyond the term of the franchise.