Under what circumstances are Crave franchisees and their principals required to pay damages, costs, and expenses to the franchisor?
Crave Franchise · 2025 FDDAnswer from 2025 FDD Document
Furthermore, Franchisee acknowledge its obligation under this Franchise Agreement directors, to and indemnify employees of and the in officers, connection with any and all claims, losses, costs, expenses, liabilities, compliance costs, and damages incurred by the indemnified party(ies) as a result of any matters associated with Franchisee's compliance with the Americans with Disabilities Act, as well as the costs, including attorneys' fees, related to the same.
In the event Franchisee or Franchisee's Principal(s) breaches any of the promises, covenants, or undertakings made herein by any act or omission, Franchisee and Franchisee's Principal(s) shall pay, by way of indemnification, all costs and expenses of any Released Franchisor Party caused by the act or omission, including reasonable attorneys' fees and costs.
Franchisee is solely responsible for all costs and expenses related to its performance, its nonperformance, and Franchisor's enforcement of this Agreement, which costs and expenses Franchisee will pay Franchisor in full, without defense or setoff, on demand.
Franchisee agrees that it will indemnify, defend, and hold harmless Franchisor and its affiliates, and its and their directors, officers, shareholders, partners, members, employees, agents, and attorneys, and the successors and assigns of any and all of them, from and against, and will reimburse Franchisor and any and all of them for, any and all loss, losses, damage, damages, claims, debts, claims, demands, or obligations that are related to or are based on this Agreement.
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 may be required to pay damages, costs, and expenses to Crave under certain circumstances. Specifically, franchisees must indemnify Crave for any claims, losses, costs, expenses, liabilities, compliance costs, and damages resulting from the franchisee's non-compliance with the Americans with Disabilities Act (ADA). This means that if a franchisee's restaurant does not meet ADA standards and Crave incurs expenses as a result, the franchisee is responsible for covering those costs.
Additionally, if a franchisee or their principal breaches any promises, covenants, or undertakings made in the General Release, they must indemnify Crave for all costs and expenses, including reasonable attorneys' fees and costs, caused by the breach. This provision underscores the importance of adhering to the terms of the General Release to avoid potential financial liabilities.
Furthermore, the franchisee is solely responsible for all costs and expenses related to their performance, nonperformance, and Crave's enforcement of the agreement. This includes an agreement to indemnify, defend, and hold harmless Crave and its affiliates from any losses, damages, claims, debts, demands, or obligations related to the Franchise Agreement. This broad indemnification clause places a significant financial responsibility on the franchisee to cover any costs Crave incurs due to the franchisee's actions or inactions related to the franchise operation.