What is the Franchisee and Franchisee's Principal(s)'s obligation if a claim is made against a Released Franchisor Party due to a purported assignment related to the Crave franchise?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
- (b) Franchisee and Franchisee's Principal(s) represent and warrant that no portion of any claim, right, demand, obligation, debt, guarantee, or cause of action released hereby has been assigned or transferred by Franchisee or Franchisee's Principal(s) to any other party, firm or entity in any manner including, but not limited to, assignment or transfer by subrogation or by operation of law.
In the event that any claim, demand, or suit shall be made or institute against any Released Franchisor Party because of any such purported assignment, transfer or subrogation, Franchisee and Franchisee's Principal(s) agree to indemnify and hold such Released Franchisor Party free and harmless from and against any such claim, demand, or suit, including reasonable costs and attorneys' fees incurred in connection therewith.
It is further agreed that this indemnification and hold harmless agreement shall not require payment to such claimant as a condition precedent to recovery under this paragraph.
Source: Item 23 — RECEIPTS (FDD pages 63–253)
What This Means (2025 FDD)
According to Crave's 2025 Franchise Disclosure Document, franchisees and their principals have specific obligations regarding claims made against the franchisor due to purported assignments. Franchisees and their principals warrant that they have not assigned or transferred any claim related to the franchise agreement to another party. This includes assignments or transfers through subrogation or by operation of law.
If a claim, demand, or suit is initiated against any Released Franchisor Party (which includes Crave Franchising, LLC, its affiliates, and related parties) because of a purported assignment, transfer, or subrogation by the franchisee or their principals, the franchisee and their principals must indemnify and hold the Released Franchisor Party harmless. This means they are responsible for protecting the franchisor from any costs, including reasonable attorney's fees, associated with the claim, demand, or suit.
The indemnification agreement does not require the franchisor to make any payments to the claimant before seeking recovery from the franchisee. This clause ensures that Crave is protected from legal and financial repercussions arising from unauthorized assignments or transfers of claims by the franchisee or their principals.