Are negligent acts or omissions related to the City Publications franchised business covered under the indemnification agreement?
City_Publications Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees to hold harmless and indemnify Franchisor and its Affiliates and Franchisor's respective members, partners, shareholders, officers, directors, employees and agents and successors or assigns (collectively "Franchisor Indemnitees") from and against all losses, damages, fines, costs, expenses, lost profits, loss, damages, or liability (including attorneys' fees and all other costs of litigation) incurred in connection with any action, suit, demand, claim, investigation, proceeding or inquiry, or any settlement thereof which arises from or is based upon (a) Franchisee's ownership or operation of the Franchised Business; (b) violation, breach or asserted violation or breach of any federal, state or local law, regulation or rule; (c) breach of any representation, warranty, covenant, or provision of this Agreement or any other agreement between Franchisee on the one hand and Franchisor or Franchisor's Affiliates on the other; (d) libel, slander or other form of defamation of Franchisor or the System by Franchisee; (e) acts, errors or omissions incurred in connection with or arising out of the Franchised Business, including any negligent or intentional acts; or (f) infringement, violation or alleged infringement or violation of any Mark, patent or copyright or any misuse of the Confidential Information. In addition, Franchisee shall indemnify Franchisor Indemnitees for any and all losses, compensatory damages, exemplary or punitive damages, fines, charges, costs, expenses, lost profits, settlement amounts, judgments, damages to Franchisor's reputation and goodwill, costs of advertising material, media time and space and substituting and replacing the same, all costs of recall, refunds, compensation, all public notices and other such amounts which may arise or result from any of the actions, commissions or items listed in this Section.
Source: Item 23 — RECEIPT (FDD pages 39–129)
What This Means (2025 FDD)
According to City Publications' 2025 Franchise Disclosure Document, the indemnification agreement does extend to cover negligent acts or omissions related to the franchised business. The franchisee agrees to protect City Publications from losses, damages, costs, and liabilities, including attorney's fees, arising from actions or claims connected to the franchisee's business operation. This includes any claims resulting from negligence.
Specifically, the franchisee must indemnify City Publications against losses stemming from acts, errors, or omissions related to the franchised business, including both negligent and intentional acts. This means that if a third party sues City Publications due to the franchisee's negligence in operating the business, the franchisee is responsible for covering City Publications's legal costs and any resulting damages.
This requirement is a standard practice in franchising, designed to protect the franchisor from liabilities caused by the franchisee's actions. However, it places a significant responsibility on the franchisee to operate the business carefully and in compliance with all applicable laws and regulations. Franchisees should ensure they have adequate insurance coverage to protect against potential claims of negligence.