Under the Chicken Guy agreement, who is required to indemnify Chicken Guy and its affiliates?
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.
Source: Item 23 — RECEIPTS (FDD pages 50–286)
What This Means (2025 FDD)
According to Chicken Guy's 2025 Franchise Disclosure Document, the developer and all guarantors of the developer's obligations are required to indemnify, defend, and hold harmless Chicken Guy and its affiliates. This indemnification extends to all losses and expenses incurred in connection with any action, suit, proceeding, claim, demand, investigation, inquiry, judgment, or appeal arising out of or resulting from the developer's franchised restaurants and activities under the agreement. However, this excludes instances of gross negligence or willful misconduct on the part of Chicken Guy.
This means that as a Chicken Guy franchisee (referred to as the developer), you are responsible for protecting Chicken Guy from any legal or financial liabilities that arise from your operation of the franchise. This includes covering legal costs, damages, and other expenses resulting from claims or lawsuits. The obligation extends not only to the franchisee but also to anyone who guarantees the franchisee's obligations, ensuring that Chicken Guy has multiple parties to seek recourse from if necessary.
It is important to note that Chicken Guy has the right, but not the obligation, to assume the defense or settlement of any claim subject to indemnification, but this does not diminish the franchisee's obligation to indemnify and hold harmless Chicken Guy. The definition of "losses and expenses" is broad, encompassing various types of damages, fees, and costs, including those related to damage to Chicken Guy's reputation and goodwill. This underscores the importance of operating the franchise in a manner that protects the brand's image and avoids potential liabilities.