Regarding recovery from third parties, are Crave's Indemnitees required to seek recovery from third parties to maintain a claim against the franchisee or its principals?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
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, the indemnification agreement within the franchise agreement does not require Crave to seek payment from a claimant before seeking recovery from the franchisee or their principals. This means that Crave can pursue the franchisee for indemnification without first attempting to recover from the party that initiated the claim against them.
This provision is significant for prospective Crave franchisees because it clarifies the process and conditions under which they might be required to indemnify Crave. The franchisee's obligation to cover claims, demands, or suits against Crave is triggered by any assignment, transfer, or subrogation initiated by the franchisee or their principals.
The fact that Crave does not have to seek payment from the original claimant before pursuing the franchisee directly impacts the franchisee's potential financial exposure. Franchisees should be aware that they could be held responsible for covering Crave's costs and attorney's fees related to claims, regardless of whether Crave has attempted to recover those costs from another party first. This could potentially increase the financial burden on the franchisee in the event of a claim.