Under what circumstances must a Cr3 American Exteriors franchisee indemnify the Indemnified Parties?

According to the 2025 Cr3 American Exteriors Franchise Disclosure Document, the standard indemnification clause has been modified for franchisees in certain states. Typically, an indemnification clause would require the franchisee to protect, reimburse, defend, and hold harmless the franchisor (or other parties) from any losses or liabilities.

However, in certain states, this obligation is limited. The Cr3 American Exteriors franchisee is not required to indemnify the franchisor or any other indemnified party for losses or liabilities resulting from the indemnified party's negligence, willful misconduct, strict liability, or fraud.

This modification provides a significant benefit to the franchisee, as it prevents them from being responsible for the franchisor's own actions or failures. Prospective franchisees should confirm whether this modification applies in their specific state and understand the implications of this clause, particularly in relation to potential liabilities and legal responsibilities.