Who are the specific parties included in the definition of 'Indemnified Parties' that a Chem Dry franchisee must indemnify?
Chem_Dry Franchise · 2024 FDDAnswer from 2024 FDD Document
FRANCHISEE agrees to indemnify, defend, and hold harmless CDI, its affiliates, and CDI'S and their respective shareholders, directors, officers, employees, agents, successors, and assignees (the "Indemnified Parties") against, and to reimburse any one or more of the Indemnified Parties for, all claims, obligations, and damages directly or indirectly arising out of the BUSINESS'S operation, the business FRANCHISEE conducts under this Agreement or outside the scope of this Agreement using the Marks, or FRANCHISEE's breach of this Agreement, including, without limitation, those alleged to be or found to have been caused by the Indemnified Party's negligence, unless (and then only to the extent that) the claims, obligations, or damages are determined to be caused solely by CDI's gross negligence or willful misconduct in a final, unappealable ruling issued by a court of, or arbitrator with, competent jurisdiction.
Source: Item 23 — Receipts (FDD pages 68–264)
What This Means (2024 FDD)
According to Chem Dry's 2024 Franchise Disclosure Document, the "Indemnified Parties" that a franchisee must indemnify, defend, and hold harmless include Chem Dry Inc. (CDI), its affiliates, and CDI's and their respective shareholders, directors, officers, employees, agents, successors, and assignees. This means the franchisee is responsible for protecting these individuals and entities from claims, obligations, and damages.
The franchisee's duty to indemnify extends to claims, obligations, and damages that directly or indirectly arise out of the Chem Dry business's operation, the business the franchisee conducts under the Franchise Agreement or outside its scope using Chem Dry's Marks, or the franchisee's breach of the agreement. This encompasses a broad range of potential liabilities related to the franchisee's actions and business operations.
However, there is an exception: the franchisee is not required to indemnify the aforementioned parties to the extent that claims, obligations, or damages are determined to be caused solely by Chem Dry's gross negligence or willful misconduct. This determination must be made by a court or arbitrator with competent jurisdiction in a final, unappealable ruling. This provides a limited safeguard for the franchisee against liabilities arising directly from Chem Dry's own egregious actions.
This type of indemnification clause is common in franchise agreements, shifting the burden of potential liabilities from the franchisor to the franchisee. Prospective Chem Dry franchisees should carefully consider the scope of this indemnification and consult with legal counsel to understand the potential risks and liabilities involved.