Does the Craters & Freighters franchisee's indemnification obligation extend to claims arising from the Franchisor's negligence?
Craters_Freighters Franchise · 2025 FDDAnswer from 2025 FDD Document
s Agreement entitling Franchisor to terminate this Agreement or exercise any or a combination of the other default remedies set forth in this Agreement.
14. INDEMNIFICATION.
Franchisee agrees, during the term of this Agreement and continuing after the termination or expiration of this Agreement, at Franchisee's own cost, to indemnify, defend, and hold harmless Franchisor, Franchisor's subsidiaries, and Franchisor's Affiliates, and their respective shareholders, directors, officers, employees, agents, successors, and assignees (each an "Indemnified Party" and, collectively, the "Indemnified Parties") from and against any and all claims, obligations, demands, losses, damages (including punitive damages), costs, suits, judgments, penalties, expenses (including reasonable attorneys' fees and amounts paid in settlement or compromise), and liabilities of any kind (collectively, "Claims"), however caused, directly or indirectly arising from or pertaining to the breach by Franchisee of its obligations under this Agreement or the operation of the Franchised Business. Such Claims will include, without limitation, those arising from the death or injury to any person or arising from damages to the property of Franchisee or Franchisor, their agents or employees, or any third person, firm, or corporation, whether or not such Claims were actually or allegedly caused wholly or in part through the active or passive negligence of Franchisor or any of its agents or employees or resulted from any strict liability imposed on Franchisor or any of its agents or employees. These indemnity obligations will continue in full force and effect subsequent to, and notwithstanding, the expiration or termination of this Agreement. Franchisor must have the right to defend any such claim against it.
15. FRANCHISEE RESTRICTIVE COVENANTS.
15.1 Franchisee Acknowledgment.
Source: Item 22 — CONTRACTS (FDD pages 49–50)
What This Means (2025 FDD)
According to Craters & Freighters' 2025 Franchise Disclosure Document, the franchisee's indemnification obligations generally extend to claims arising from the franchisor's negligence. Specifically, the franchisee agrees to indemnify Craters & Freighters and its affiliates from claims and liabilities arising from the franchisee's breach of the agreement or the operation of the franchised business. This includes claims arising from death, injury, or property damage, even if such claims were allegedly caused by the negligence of Craters & Freighters.
However, this broad indemnification is subject to certain limitations, particularly for franchisees operating in Washington state. The FDD includes a Washington addendum that modifies the indemnification clause. According to this addendum, a Craters & Freighters franchisee in Washington is not obligated to indemnify the franchisor for losses caused solely and directly by the franchisor's negligence, willful misconduct, strict liability, or fraud.
For prospective Craters & Freighters franchisees, it's crucial to understand the scope of the indemnification clause and how it applies in their specific state. Franchisees outside of Washington will likely be held to the broader indemnification standard, potentially requiring them to cover claims arising from the franchisor's actions. Franchisees should consult with a legal professional to fully understand their obligations and potential liabilities under the franchise agreement.