Under the Churchs Chicken franchise agreement, what specific events trigger the franchisee's obligation to indemnify Cajun and its affiliates?
Churchs_Chicken Franchise · 2025 FDDAnswer from 2025 FDD Document
22. INDEMNIFICATION
- 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 the 2025 Churchs Chicken Franchise Disclosure Document, franchisees must indemnify Cajun and its affiliates under certain circumstances. Specifically, the franchisee is obligated to defend and hold harmless Cajun and its affiliates from losses and expenses resulting from: any training provided by Churchs Chicken, any breach of the Franchise Agreement by the franchisee, the operation of the franchised restaurant, or any action or omission by the franchisee or their employees or agents. This obligation applies to actions, suits, claims, demands, investigations, or proceedings against Cajun and its affiliates.
This indemnification clause means that if a third party sues Churchs Chicken due to something related to the franchisee's actions or the restaurant's operations, the franchisee is responsible for covering Cajun's legal costs and any resulting damages. The franchisee is required to promptly notify Churchs Chicken of any such claims and provide relevant documentation. However, the franchisee is not responsible for losses caused by the gross negligence or willful misconduct of Churchs Chicken itself.
Churchs Chicken retains the right to assume the defense and settlement of any claim subject to indemnification, but is not obligated to do so. This does not relieve the franchisee of their indemnification obligations. Furthermore, Churchs Chicken is not required to seek recoveries from third parties to mitigate losses. This clause is a standard inclusion in franchise agreements, designed to protect the franchisor from liabilities arising from the franchisee's operation of the business.