What triggers the franchisee's obligation to indemnify City Wide?
City_Wide Franchise · 2025 FDDAnswer from 2025 FDD Document
n Of Liability. IN NO EVENT SHALL CITY WIDE OR ANY OF ITS SUPPLIERS HAVE ANY LIABILITY TO FRANCHISEE OR ANY OTHER PERSON HEREUNDER FOR CONSEQUENTIAL, PUNITIVE, SPECIAL OR INCIDENTAL DAMAGES OF ANY KIND WHATSOEVER (INCLUDING, WITHOUT LIMITATION, DAMAGES FOR LOSS OF BUSINESS PROFITS, BUSINESS INTERRUPTION, LOSS OF BUSINESS INFORMATION OR ANY OTHER PECUNIARY LOSS) RELATED TO THIS AGREEMENT OR RESULTING FROM FRANCHISEE'S USE OR INABILITY TO USE THE TECHNOLOGY SYSTEM, ARISING FROM ANY CAUSE OF ACTION WHATSOEVER, INCLUDING CONTRACT, WARRANTY, STRICT LIABILITY, OR NEGLIGENCE (EVEN IF CITY WIDE HAS BEEN NOTIFIED OF THE POSSIBILITY OF SUCH DAMAGES). FRANCHISEE AGREES THAT IN NO EVENT SHALL CITY WIDE OR SUPPLIERS' LIABILITY HEREUNDER EXCEED THE AGGREGATE OF ALL AMOUNTS PAID TO CITY WIDE BY FRANCHISEE HEREUNDER.
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- Indemnification. Franchisee will indemnify, defend and hold harmless City Wide and its past, present and future officers, directors, agents, attorneys, employees, shareholders, successors, assigns and affiliates (collectively "City Wide Indemnities") from and against any and all expenses, damages, taxes, claims, suits, losses, actions, judgments, liabilities and costs, including City Wide Indemnities' reasonable attorney's fees and in-house counsel 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 in connection with City Wide's provision of IT Services, or otherwise related to or arising out of a Cyber Event.
Source: Item 22 — CONTRACTS (FDD page 65)
What This Means (2025 FDD)
According to City Wide's 2025 Franchise Disclosure Document, the franchisee has an obligation to indemnify City Wide under specific circumstances. One such trigger occurs if City Wide temporarily operates the franchised business for the franchisee. In this case, the franchisee agrees to indemnify and hold harmless City Wide and any City Wide representative from all claims arising from the acts and omissions of City Wide and its representative.
Another trigger for indemnification arises in connection with City Wide's provision of IT Services or any Cyber Event. The franchisee will indemnify, defend, and hold harmless City Wide and its officers, directors, agents, attorneys, employees, shareholders, successors, assigns, and affiliates from any expenses, damages, taxes, claims, suits, losses, actions, judgments, liabilities, and costs, including attorney's fees, related to these events.
This means that as a City Wide franchisee, you could be responsible for covering City Wide's legal costs and other expenses if certain claims or lawsuits arise related to the operation of your franchise, particularly if City Wide is temporarily managing the business or if the claim is related to IT services or a cyber event. It is important to understand the scope of these indemnification clauses and potentially seek legal counsel to assess the risks involved.