What costs are included in the indemnification obligation of a Counselor Realty franchisee?

According to Counselor Realty's 2025 Franchise Disclosure Document, franchisees are obligated to defend, indemnify, and hold harmless Counselor Realty, its affiliates, and their respective officers, agents, and employees. This obligation extends to all suits, claims, demands, liabilities, and costs, including attorneys' fees. These costs can arise in tort, contract, or otherwise, stemming from or connected to the franchisee's operation of the business. However, this indemnification does not apply to the extent that such suits, claims, demands, liabilities, and costs are caused by the direct and proximate consequences of Counselor Realty's negligence.

In practical terms, this means that if a third party sues Counselor Realty due to something related to the franchisee's business operations (e.g., a customer injury on the franchisee's property or a contractual dispute involving the franchisee), the franchisee is responsible for covering Counselor Realty's legal defense costs, any resulting liabilities, and other associated expenses. This indemnification clause is a standard provision in franchise agreements, designed to protect the franchisor from liabilities arising from the franchisee's actions.

However, the franchisee is released from these obligations if the issue is a direct result of Counselor Realty's negligence. The franchisee also waives and releases all claims against Counselor Realty, its affiliates, and their respective officers, agents, and employees for damages to property or injuries to persons arising out of or in connection with the operation of the Business except to the extent caused by direct and proximate consequences of Counselor Realty's negligence. Prospective franchisees should carefully consider the scope of this indemnification obligation and consult with legal counsel to understand its potential financial implications.