Does the indemnification obligation survive the termination of the Accounting Services Agreement with City Wide?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
City Wide will indemnify and hold Franchisee and its employees or agents ("Franchisee Indemnities") harmless from and against any and all expenses, damages, claims, suits, losses, actions, judgments, liabilities and costs, including Franchisee Indemnities' reasonable attorney's fees, arising out of or based on any claim, action, judicial proceeding, administrative proceeding, personal injury or damage to real or personal property brought or threatened as a result of any negligence or willful misconduct by City Wide.
All such indemnification will survive termination or expiration of this Agreement.
Applicable Law and Attorney's Fees.
This Agreement will be governed by and construed in accordance with the laws of the State of Kansas.
Any action brought to enforce this Agreement, or any right granted in this Agreement will be brought in accordance with the dispute resolution provisions contained in the most current form of the Franchise Agreement between the Parties.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the indemnification obligations within the Accounting Services Agreement do not explicitly state that they survive termination, but the agreement does state that terms that by their nature extend beyond termination will remain in effect. Specifically, City Wide will indemnify the Franchisee and its employees or agents from expenses, damages, claims, suits, losses, actions, judgments, liabilities, and costs, including attorney's fees, arising from negligence or willful misconduct by City Wide, and this indemnification survives termination or expiration of the agreement.
Conversely, the franchisee is obligated to indemnify City Wide and its related parties from expenses, damages, taxes, claims, suits, losses, actions, judgments, liabilities, and costs, including attorney's fees, arising from City Wide's provision of services or any breach of the agreement by City Wide. The FDD does not explicitly state whether this specific indemnification obligation survives termination of the Accounting Services Agreement. However, the agreement states that any terms that by their nature extend beyond termination or expiration will remain in effect until fulfilled.
In practical terms, this means that even after the Accounting Services Agreement ends, City Wide remains liable for its prior negligence or misconduct. However, it is not explicitly stated if the franchisee's indemnification obligations to City Wide continue after the agreement's termination. A prospective franchisee should seek clarification from City Wide regarding whether the franchisee's indemnification obligations also survive the termination of the Accounting Services Agreement to fully understand their potential long-term liabilities.