Does the Coffee News franchisee indemnify the franchisor for losses arising from damage to property?
Coffee_News Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee will indemnify Franchisor and its employees and hold them harmless from and against all losses, claims, actions, damages, liabilities and expenses, including attorneys fees, arising from loss of life, personal injury, damage to property or any other loss or injury suffered by Franchisor's agents, employees or third parties, arising directly or indirectly from, or as a result of, or in connection with Franchisee's operation of the Periodical business in the franchised area or by reason of Franchisee's use of the system, names or marks of the Periodical.
Franchisee shall indemnify Franchisor and its employees and hold them harmless from and against all copyright or trademark challenges of Franchisee's right, title or interest in any trade names, service marks, trade symbols, emblems, signs, slogans or insignia used in Franchisee's franchised business.
Further, Franchisee shall indemnify Franchisor and its employees and hold them harmless from and against all claims arising out of Franchisee's use of any such social media network.
Franchisees have no obligation. however, to indemnify or hold harmless an indemnified party for losses to the extent that they are determined by a competent court to have been caused solely and directly by the indemnified party's gross negligence, willful misconduct, strict liability, or fraud.
Source: Item 23 — Receipts (FDD pages 36–118)
What This Means (2025 FDD)
According to the 2025 Coffee News Franchise Disclosure Document, the franchisee does indemnify the franchisor for losses arising from damage to property. Specifically, the franchisee agrees to protect Coffee News and its employees from losses, claims, actions, damages, liabilities, and expenses, including attorney fees, related to property damage. This includes damage suffered by Coffee News's agents, employees, or third parties. The damage must arise directly or indirectly from the franchisee's operation of the Coffee News business, or from the franchisee's use of the Coffee News system, names, or marks.
This obligation means that if a Coffee News franchisee's actions lead to property damage, the franchisee is responsible for covering the associated costs, including legal fees. This could include incidents such as damage to a building where Coffee News periodicals are distributed or damage caused by the franchisee while conducting business activities. The franchisee's responsibility extends to protecting Coffee News from any claims or lawsuits resulting from such incidents.
However, the franchisee is not required to indemnify Coffee News for losses caused solely and directly by Coffee News's own gross negligence, willful misconduct, strict liability, or fraud, as determined by a court. This provides some protection to the franchisee in situations where Coffee News is directly responsible for the losses. It is important for prospective franchisees to understand the scope of this indemnification clause and to ensure they have adequate insurance coverage to protect themselves against potential claims.
Indemnification clauses are common in franchise agreements, as they protect the franchisor from liabilities arising from the franchisee's operations. Prospective Coffee News franchisees should carefully review this section of the Franchise Agreement with legal counsel to fully understand their obligations and potential liabilities.