Does the Coffee News franchisee indemnify the franchisor for losses arising from liabilities?
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, franchisees are required to indemnify Coffee News and its employees. This means the franchisee must protect Coffee News from losses, claims, actions, damages, liabilities, and expenses, including attorney fees, that arise from the franchisee's operation of the Periodical business. This includes issues related to personal injury, property damage, or any other loss suffered by Coffee News' agents, employees, or third parties that are connected to the franchisee's business. Franchisees also must indemnify Coffee News from copyright or trademark challenges related to the trade names, service marks, or other identifying symbols used in the franchisee's business, as well as claims arising from the franchisee's use of social media.
However, the obligation to indemnify Coffee News does not apply if a court determines that the losses were caused directly and solely by Coffee News' gross negligence, willful misconduct, strict liability, or fraud. This provides a limited exception where Coffee News itself is responsible for the losses.
This type of indemnification clause is common in franchise agreements. It aims to protect the franchisor from liabilities caused by the franchisee's actions. Prospective Coffee News franchisees should carefully review this section of the Franchise Agreement with legal counsel to fully understand the scope of their indemnification obligations and the potential financial impact.