How does the indemnification obligation for Chesters franchisees (Item 7) relate to their obligations to comply with laws and regulations (Item 8)?
Chesters Franchise · 2025 FDDAnswer from 2025 FDD Document
| Obligation | Section in agreement | Disclosure document item | |
|---|---|---|---|
| p. | Indemnification | 22 of Agreement | 6 |
Any provision in the franchise agreement or related agreements requiring the franchise eto indemnify, reimburse, defend, or hold harmless the franchisor or other parties is hereby modified such that the franchisee has no obligation to indemnify, reimburse, defend, or hold harmless the franchisor or any other indemnified party for losses or liabilities to the extent that they are caused by the indemnified party's negligence, willful misconduct, strict liability, or fraud.
| Obligation | Section in agreement | Disclosure document item | |
|---|---|---|---|
| g. | Compliance with standards and policies/operating manual | 6, 8, 10, and 13 of Agreement | 8, 11, and 14 |
What This Means (2025 FDD)
According to Chesters's 2025 Franchise Disclosure Document, Item 9 outlines the franchisee's obligations, referencing both the franchise agreement sections and relevant disclosure document items. Specifically, it links the franchisee's obligation to comply with standards, policies, and the operating manual to Sections 6, 8, 10, and 13 of the agreement, and Items 8, 11, and 14 of the disclosure document.
Item 9 also indicates that the franchisee has an indemnification obligation, which is tied to Section 22 of the agreement and Item 6 of the disclosure document. This means that the franchisee may be required to protect Chesters from losses or liabilities under certain circumstances, as detailed in those sections.
However, Item 23 includes an addendum that modifies the indemnification clause. It states that the franchisee is not obligated to indemnify Chesters for losses or liabilities resulting from Chesters's own negligence, willful misconduct, strict liability, or fraud. This modification provides some protection to the franchisee, ensuring they are not responsible for Chesters's actions. Item 7 does not appear in the provided excerpts.