Does the General Release for Cilantro Taco Grill cover actions or omissions by the Franchisee?
Cilantro_Taco_Grill Franchise · 2024 FDDAnswer from 2024 FDD Document
connected with the Franchise Agreement or this General Release, and further promises never from this day forward, directly or indirectly, to institute, prosecute, commence, join in, or generally attempt to assert or maintain any action thereon against any Released Franchisor Party, in any court or tribunal of the United States of America, any state thereof, or any other jurisdiction for any matter or claim arising before execution of this General Release. In the event Franchisee or Franchisee's Principal(s) breaches any of the promises, covenants, or undertakings made herein by any act or omission, Franchisee and Franchisee's Principal(s) shall pay, by way of indemnification, all costs and expenses of any Released Franchisor Party
(b) Franchisee and Franchisee's Principal(s) represent and warrant that no portion of any claim, right, demand, obligation, debt, guarantee, or cause of action released hereby has been assigned or transferred by Franchisee or Franchisee's Principal(s) to any other party, firm or entity in any manner including, but not limited to, assignment or transfer by subrogation or by operation of law. In the event that any claim, demand, or suit shall be made or institute against any Released Franchisor Party because of any such purported assignment, transfer or subrogation, Franchisee and Franchisee's Principal(s) agree to indemnify and hold such Released Franchisor Party free and harmless from and against any such claim, demand, or suit, including reasonable costs and attorneys' fees incurred in connection therewith. It is further agreed that this indemnification and hold harmless agreement shall not require payment to such claimant as a condition precedent to recovery under this paragraph.
caused by the act or omission, including reasonable attorneys' fees and costs.
Source: Item 23 — RECEIPT (FDD pages 52–208)
What This Means (2024 FDD)
According to the 2024 Cilantro Taco Grill Franchise Disclosure Document, the General Release does address actions or omissions by the franchisee. Specifically, if the franchisee or their principals breach any promises, covenants, or undertakings made in the General Release through any act or omission, they are obligated to indemnify the released franchisor party. This indemnification covers all costs and expenses incurred by the franchisor as a result of the franchisee's actions or omissions.
This means that a franchisee of Cilantro Taco Grill is responsible for any costs or damages the franchisor incurs due to the franchisee's breach of the General Release. This includes legal fees and other expenses related to defending against claims arising from the franchisee's actions or omissions. The franchisee is essentially agreeing to protect the franchisor from any liabilities stemming from their conduct related to the franchise agreement.
Furthermore, the franchisee agrees to indemnify and hold the franchisor harmless from any claims, demands, or suits instituted against the franchisor due to any purported assignment, transfer, or subrogation by the franchisee or their principals. This includes covering reasonable costs and attorneys' fees incurred in connection with such claims. This indemnification agreement does not require the franchisor to make any payments to the claimant before seeking recovery from the franchisee.
In essence, the General Release is designed to protect Cilantro Taco Grill from potential liabilities arising from the franchisee's actions, omissions, or any claims related to the franchise agreement. Franchisees should carefully review the terms of the General Release and understand their obligations to indemnify and hold harmless the franchisor to avoid potential financial repercussions.