Does the indemnification responsibility in Section 14 of the Cicis agreement pertain to obligations under the Anti-Terrorist Activities section?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
You specifically acknowledge and agree that your indemnification responsibilities as provided in Section 14. of this Agreement pertain to your obligations under this Section 5.H.
Any misrepresentation by you under this Section 5.H. or any violation of the Anti-Terrorism Laws by you, your Owners, or your employees will constitute grounds for immediate termination of this Agreement and any other agreement you have entered into with us or one of our affiliates in accordance with the terms of Sections 15.A(2) of this Agreement. "Anti-Terrorism Laws" means Executive Order 13224 issued by the President of the United States, the Terrorism Sanctions Regulations (Title 31, Part 595 of the U.S.
Code of Federal Regulations), the Foreign Terrorist Organizations Sanctions Regulations (Title 31, Part 597 of the U.S.
Code of Federal Regulations), the Cuban Assets Control Regulations (Title 31, Part 515 of the U.S.
Code of Federal Regulations), the USA PATRIOT Act, and all other present and future Laws and any other requirements of any governmental authority (including the United States Department of Treasury Office of Foreign Assets Control) addressing or in any way relating to terrorist acts and acts of war.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the franchisee's indemnification responsibilities, as detailed in Section 14 of the franchise agreement, specifically apply to their obligations under Section 5.H, which concerns Anti-Terrorist Activities. This means that the franchisee is responsible for covering any claims, damages, and costs that Cicis incurs due to the franchisee's failure to comply with Anti-Terrorism Laws. These laws include Executive Order 13224, the Terrorism Sanctions Regulations, the Foreign Terrorist Organizations Sanctions Regulations, the Cuban Assets Control Regulations, the USA PATRIOT Act, and any other laws relating to terrorist acts and acts of war.
This indemnification extends to all obligations, damages (both actual and consequential), and costs that Cicis may incur while defending against any claim. These costs include reasonable fees for accountants, arbitrators, attorneys, and expert witnesses, as well as costs for investigation, proof of facts, court costs, travel, living expenses, and other litigation or dispute resolution expenses. Cicis has the right to defend any claim at the franchisee's expense, including choosing legal counsel and agreeing to settlements or other corrective actions.
Furthermore, this indemnification remains in effect even after the franchise agreement expires or is terminated. Cicis is not required to seek recovery from any insurer or third party before making a claim against the franchisee. The franchisee's failure to comply with Anti-Terrorism Laws or any misrepresentation regarding compliance can lead to immediate termination of the franchise agreement and any other agreements with Cicis or its affiliates.
In practical terms, a Cicis franchisee must ensure strict compliance with all Anti-Terrorism Laws and related regulations. This includes verifying that neither the franchisee nor any of their owners, employees, or associates are listed in connection with any Anti-Terrorism Law and avoiding any dealings with individuals or entities on such lists. Failure to do so not only risks immediate termination of the franchise agreement but also exposes the franchisee to significant financial liabilities through the indemnification clause.