Can a Cicis Indemnified Party choose their own legal counsel at the franchisee's expense when defending a claim?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
For purposes of this indemnification, "claims" include all obligations, damages (actual, consequential, or otherwise), and costs that any Indemnified Party reasonably incurs in defending any claim against it, including, without limitation, reasonable accountants', arbitrators', attorneys', and expert witness fees, costs of investigation and proof of facts, court costs, travel and living expenses, and other expenses of litigation or alternative dispute resolution, regardless of whether litigation or alternative dispute resolution is commenced. Each Indemnified Party may defend any claim against it at your expense (including choosing and retaining its own legal counsel) and agree to settlements or take any other remedial, corrective, or other actions. This indemnity will continue in full force and effect subsequent to and notwithstanding this Agreement's expiration or termination. An Indemnified Party need not seek recovery from any insurer or other third party, or otherwise mitigate its losses and expenses, in order to maintain and recover fully a claim against you under this subparagraph. You agree that a failure to pursue a recovery or mitigate a loss will not reduce or alter the amounts that an Indemnified Party may recover from you under this Section 8.B.
Source: Item 23 — RECEIPTS (FDD pages 65–263)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, an Indemnified Party can choose and retain their own legal counsel at the franchisee's expense when defending a claim against it. This is part of the indemnification agreement where the franchisee agrees to protect Cicis, its affiliates, and their personnel from claims and damages arising from the franchisee's business operations or breach of the franchise agreement.
The franchisee is responsible for covering all costs reasonably incurred by the Indemnified Party in defending a claim, including reasonable attorneys' fees, court costs, and other litigation expenses. This obligation exists regardless of whether litigation or alternative dispute resolution is initiated. The franchisee's responsibility to cover these costs remains in effect even after the franchise agreement expires or terminates.
This arrangement means that a Cicis franchisee could face significant legal expenses if a claim arises, even if Cicis is also involved in the claim. The franchisee does not have control over the choice of legal counsel for the Indemnified Party, potentially leading to higher legal bills than if the franchisee could negotiate or select counsel themselves. The Indemnified Party is not required to seek recovery from any insurer or mitigate losses before seeking full recovery from the franchisee.