Under the Cicis franchise agreement, what is included in the definition of 'claims' for indemnification purposes?
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 subparagraph.
Source: Item 22 — CONTRACTS (FDD pages 64–65)
What This Means (2025 FDD)
According to Cicis's 2025 Franchise Disclosure Document, the term "claims" for indemnification includes a comprehensive list of potential financial burdens. Specifically, it encompasses all obligations, damages (whether actual, consequential, or otherwise), and costs that an indemnified party reasonably incurs while defending against any claim.
This definition extends to various expenses, including reasonable fees for accountants, arbitrators, attorneys, and expert witnesses. It also covers costs associated with investigating and proving facts, court costs, travel and living expenses, and other expenses related to litigation or alternative dispute resolution, regardless of whether formal proceedings are initiated. This means that if Cicis is faced with a claim and incurs expenses defending itself, the franchisee may be responsible for covering these costs as part of the indemnification agreement.
The Cicis franchise agreement also stipulates that each indemnified party has the right to defend any claim at the franchisee's expense, including the freedom to choose and retain their own legal counsel, agree to settlements, or take any other remedial actions. This indemnity remains in effect even after the franchise agreement expires or terminates. Furthermore, an indemnified party is not obligated to seek recovery from any insurer or third party or mitigate losses before pursuing a claim against the franchisee, and failure to do so will not reduce the amounts recoverable from the franchisee.