Is a Cicis Indemnified Party required to seek recovery from insurance or other third parties before seeking indemnification from the franchisee?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
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 does not need to seek recovery from any insurer or other third party before making a claim against the franchisee under the indemnification agreement. The Indemnified Party also does not need to mitigate its losses and expenses to fully recover a claim from the franchisee.
This means that Cicis and its affiliates can immediately seek indemnification from a franchisee for claims, obligations, and damages without first attempting to recover from insurance policies or other sources. The franchisee is responsible for covering these costs, regardless of whether Cicis could have reduced its losses through other means.
This provision places a significant financial burden on the franchisee, as they are the primary source of recovery for any claims against the Indemnified Parties. Franchisees should be aware of this obligation and understand the potential financial implications before entering into a franchise agreement with Cicis.