What individuals or entities are included in the definition of 'indemnitees' that Checkersrallys franchisees must indemnify?
Checkersrallys Franchise · 2025 FDDAnswer from 2025 FDD Document
17.02 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, (iii) the marketing, promotion, advertisement or sale of any of the products and services offered by your Franchised Restaurant pursuant to this Agreement, including unfair or fraudulent advertising claims (whether in print advertising or electronic media), and product liability claims, (iv) your development, ownership, operation and/or closing of your Franchised Restaurant, (v) employment matters in connection with your Franchised Restaurant, and (vi) 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,
Source: Item 22 — CONTRACTS (FDD pages 91–92)
What This Means (2025 FDD)
According to Checkersrallys's 2025 Franchise Disclosure Document, the term "indemnitees" includes Checkersrallys, its Affiliates, and their respective directors, officers, employees, shareholders, members, agents, successors, and assigns. This means that a Checkersrallys franchisee is obligated to protect these individuals and entities from losses and expenses arising from certain events.
This indemnification clause requires the franchisee to cover losses and expenses incurred by the indemnitees due to litigation, claims, demands, investigations, or inquiries resulting from the franchisee's actions or failures. These actions include breaches of the franchise agreement, misrepresentations, issues with marketing or sales of products and services, problems related to the restaurant's operation, employment matters, or unauthorized services.
The franchisee's duty to indemnify applies regardless of whether the indemnitees' negligence contributed to the loss, liability, or expense. However, the franchisee is not responsible for liabilities resulting from the indemnitees' breach of the agreement or their gross negligence or willful acts, unless joint liability is involved. This means that Checkersrallys franchisees take on significant financial responsibility for potential liabilities related to the operation of their franchise.
Such indemnification clauses are standard in franchise agreements. Prospective Checkersrallys franchisees should carefully review this section of the Franchise Agreement with a legal professional to fully understand the scope of their indemnification obligations and potential financial exposure. Understanding the specific triggers for indemnification and the extent of coverage is crucial for managing risk and protecting their investment.