What section of the Cicis Franchise Disclosure Document outlines the indemnification procedure?
Cicis Franchise · 2025 FDDAnswer from 2025 FDD Document
penalties, causes of action, liabilities or losses (including, without limitation, any and all sums paid for settlement of claims, attorneys fees, consultant and expert fees) arising during or after the Lease Term from or in connection with the presence, suspected presence, use, generation, storage, release or disposal of hazardous substances (whether caused by Landlord or by any prior owner or operator of the Premises or the Shopping Center) unless the hazardous substances are present solely as the result of negligence, willful misconduct or other acts of Tenant. Without limitation of the foregoing, this indemnification shall include any and all costs incurred due to any investigation of the site or any required repair, cleanup, removal, detoxification, restoration or closure mandated by federal, state or local agency or political subdivision. This indemnification shall specifically include any and all costs due to hazardous substances which flow, migrate or percolate into, onto or under the Premises or Shopping Center after the Commencement Date.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
Based on the 2025 Cicis Franchise Disclosure Document, Item 22 discusses contracts and includes information about indemnification. Specifically, the document states that the indemnification covers all costs incurred due to any investigation of the site or any required repair, cleanup, removal, detoxification, restoration, or closure mandated by a federal, state, or local agency. This also includes costs due to hazardous substances that migrate onto or under the premises after the commencement date.
This section is important for prospective franchisees as it outlines their responsibilities regarding potential environmental issues at the restaurant location. The franchisee may be responsible for covering the costs associated with environmental investigations, remediation, and compliance, even if the hazardous substances migrate to the property after the franchise agreement commences. This could potentially lead to significant unforeseen expenses for the franchisee.
Furthermore, the FDD defines "claims" within the context of indemnification, specifying that it encompasses all obligations, damages (actual, consequential, or otherwise), and costs reasonably incurred by any Indemnified Party in defending against any claim. This includes, but is not limited to, reasonable accountants', arbitrators', attorneys', and expert witness fees, costs of investigation and proof of facts, court costs, travel and living expenses, and other expenses related to litigation or alternative dispute resolution, regardless of whether formal legal proceedings are initiated.