What is the definition of 'Indemnitees' according to the Chicken Guy franchise agreement?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer and all guarantors of Developer's obligations under this Agreement shall, at all times, indemnify, defend (with counsel reasonably acceptable to Chicken Guy), and hold harmless (to the fullest extent permitted by law) Chicken Guy and its affiliates, and their respective successors, assigns, past and present stockholders, directors, officers, employees, agents and representatives (collectively "Indemnitees") from and against all "losses and expenses" (as defined below) incurred in connection with any action, suit, proceeding, claim, demand, investigation, inquiry (formal or informal), judgment or appeal thereof by or against Indemnitees or any settlement thereof (whether or not a formal proceeding or action had been instituted), arising out of or resulting from or connected with Developer's (or its employees') development of the Franchised Restaurants and Developer's (or its employees') activities under this Agreement, excluding the gross negligence or willful misconduct of any Indemnitee.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to the 2025 Chicken Guy Franchise Disclosure Document, the term 'Indemnitees' encompasses Chicken Guy and its affiliates, along with their respective successors, assigns, past and present stockholders, directors, officers, employees, agents, and representatives. This definition is relevant within the context of indemnification, where the developer (franchisee) agrees to protect these 'Indemnitees' from losses and expenses.
This means that as a Chicken Guy franchisee (referred to as 'Developer' in the agreement), you are obligated to defend and hold harmless not only Chicken Guy itself but also a wide range of related parties. This obligation extends to any action, suit, proceeding, claim, or demand arising from your development of the franchised restaurant or your activities under the franchise agreement. However, this indemnification does not apply to situations involving the gross negligence or willful misconduct of any Indemnitee.
The franchisee's duty to indemnify covers all 'losses and expenses' incurred by the Indemnitees. It is important to note that the franchisee must promptly notify Chicken Guy of any such claims or legal actions. Chicken Guy, at its discretion, may choose to assume the defense or settlement of any claim subject to indemnification, but this does not relieve the franchisee of their indemnification obligations. This clause is a standard risk-allocation measure in franchising, designed to protect the franchisor from liabilities arising from the franchisee's operations.
Prospective Chicken Guy franchisees should carefully consider the scope of this indemnification clause and understand the potential financial implications of being responsible for the legal defense and any resulting settlements or judgments involving a broad group of 'Indemnitees'. It would be prudent to consult with a legal professional to fully understand the obligations and potential liabilities associated with this clause.