What is Churchs Chicken's obligation regarding assuming the defense of any action subject to indemnification?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- B. At Developer's expense and risk, Cajun may elect to assume (but under no circumstances will Cajun 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 Cajun and Indemnitees.
Cajun shall not be obligated to seek recoveries from third parties or otherwise mitigate losses.
Source: Item 23 — RECEIPT (FDD pages 68–406)
What This Means (2025 FDD)
According to Churchs Chicken's 2025 Franchise Disclosure Document, Churchs Chicken (referred to as Cajun in the document) may elect to assume the defense and/or settlement of any action subject to indemnification at the Developer's (franchisee) expense and risk. However, Churchs Chicken is under no obligation to undertake such defense or settlement.
Even if Churchs Chicken does elect to assume the defense, this does not diminish the franchisee's obligation to indemnify and hold harmless Churchs Chicken and its Indemnitees. This means that even if Churchs Chicken takes over the legal proceedings, the franchisee is still responsible for covering any losses and expenses that Churchs Chicken incurs.
Furthermore, Churchs Chicken is not obligated to seek recoveries from third parties or otherwise mitigate losses. This implies that Churchs Chicken can pursue the case as they see fit without having to worry about minimizing the financial impact, which ultimately falls on the franchisee through the indemnification agreement. This arrangement is generally favorable to the franchisor, as it retains control over the defense without bearing the financial burden.