Under what circumstances is a Churchs Chicken franchisee required to indemnify Cajun and its affiliates?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
- A. Franchisee and all guarantors of Franchisee's obligations under this Agreement shall, at all times, indemnify, defend (with counsel reasonably acceptable to Cajun), and hold harmless (to the fullest extent permitted by law) Cajun 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 (1) any training provided by Cajun or its affiliates or another Church's franchisee, (2) any breach or default under this Agreement by Franchisee, (3) the operations of the Franchised Restaurant, or (4) any other action or omission by Franchisee or its employees or agents, except to the extent caused by the gross negligence or willful misconduct of Cajun.
Franchisee promptly shall give Cajun notice of any such action, suit, proceeding, claim, demand, inquiry or investigation filed or instituted against Franchisee and shall furnish Cajun with copies of any documents from such matters as Cajun may request.
- B. At Franchisee'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 Franchisee'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, a franchisee must indemnify Cajun and its affiliates under specific circumstances. The franchisee is obligated to defend, indemnify, and hold harmless Cajun and its affiliates from all losses and expenses. This obligation extends to their successors, assigns, stockholders, directors, officers, employees, agents, and representatives.
The circumstances triggering this indemnification include any action, suit, proceeding, claim, demand, investigation, inquiry, judgment, or appeal arising from or connected with several key areas. These areas are training provided by Cajun or its affiliates or another Church's franchisee, any breach or default by the franchisee under the Franchise Agreement, the operations of the franchised restaurant, or any other action or omission by the franchisee, its employees, or agents. However, there is an exception: the franchisee is not required to indemnify Cajun to the extent that the losses or expenses are caused by the gross negligence or willful misconduct of Cajun itself.
The franchisee is required to promptly notify Cajun of any such legal actions or claims and provide copies of relevant documents. Cajun has the option, but not the obligation, to assume the defense or settlement of any claim subject to indemnification, which does not diminish the franchisee's indemnification obligations. Cajun is not obligated to seek recoveries from third parties or mitigate losses. This means that the franchisee bears significant responsibility for legal and financial liabilities arising from the operation of the Churchs Chicken franchise, emphasizing the importance of careful management and compliance with the franchise agreement.