What specific events trigger the indemnification obligation of the Developer under the Chicken Guy agreement?
Chicken_Guy Franchise · 2025 FDDAnswer from 2025 FDD Document
A. 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.
Developer promptly shall give Chicken Guy written notice of any such action, suit, proceeding, claim, demand, inquiry or investigation filed or instituted against Developer and, upon request, shall furnish Chicken Guy with copies of any documents from such matters as Chicken Guy may request.
- B. At Developer's expense and risk, Chicken Guy may elect to assume (but under no circumstances will Chicken Guy be obligated to undertake), the defense and/or settlement of any action, suit, proceeding, claim, demand, investigation, inquiry, judgment or appeal thereof subject to this indemnification.
Such an undertaking shall, in no manner or form, diminish Developer's obligation to indemnify and hold harmless Chicken Guy and Indemnitees.
Chicken Guy shall not be obligated to seek recoveries from third parties or otherwise mitigate losses.
- C. As used in this Section, the phrase "losses and expenses" shall include, but not be limited to, all losses; compensatory, exemplary and punitive damages; fines; charges; costs; expenses; lost profits; reasonable attorneys' fees; expert witness fees; court costs; settlement amounts; judgments; compensation for damages to Chicken Guy's reputation and goodwill; costs of or resulting from delays; financing; costs of advertising material and media time/space and the costs of changing, substituting or replacing the same; and any and all expenses of recall, refunds, compensation, public notices and other such amounts incurred in connection with the matters described.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the Developer's indemnification obligations are triggered by actions, suits, proceedings, claims, demands, investigations, inquiries, judgments, or appeals that arise out of, result from, or are connected with the Developer's (or its employees') development of the Franchised Restaurants and the Developer's (or its employees') activities under the Development Agreement. This means that if a third party brings a claim against Chicken Guy related to the Developer's actions in developing or operating the restaurants, the Developer is obligated to defend and hold Chicken Guy harmless from any resulting losses and expenses. This obligation extends to all guarantors of the Developer's obligations under the Development Agreement.
The indemnification extends to Chicken Guy and its affiliates, as well as their respective successors, assigns, past and present stockholders, directors, officers, employees, agents, and representatives. The definition of "losses and expenses" is broad, including all losses; compensatory, exemplary and punitive damages; fines; charges; costs; expenses; lost profits; reasonable attorneys' fees; expert witness fees; court costs; settlement amounts; judgments; compensation for damages to Chicken Guy's reputation and goodwill; costs of or resulting from delays; financing; costs of advertising material and media time/space and the costs of changing, substituting or replacing the same; and any and all expenses of recall, refunds, compensation, public notices and other such amounts incurred in connection with the matters described.
However, the Developer is not required to indemnify Chicken Guy for losses and expenses resulting from the gross negligence or willful misconduct of Chicken Guy itself. The Developer is required to provide Chicken Guy with prompt written notice of any such action, suit, proceeding, claim, demand, inquiry, or investigation. Chicken Guy has the option, but not the obligation, to assume the defense and/or settlement of any action subject to indemnification, but this does not diminish the Developer's indemnification obligations. Chicken Guy is not obligated to seek recoveries from third parties or otherwise mitigate losses.