Under what circumstances is a Crave sublessee required to indemnify the sublessor?

According to Crave's 2025 Franchise Disclosure Document, a sublessee is required to indemnify the sublessor under specific circumstances outlined in the sublease agreement. The sublessee must protect and hold the sublessor harmless from any losses, fines, suits, damages, expenses, claims, demands, and actions that arise due to the sublessee's negligence, breach of the sublease, or failure to perform any condition specified in the agreement. This means the sublessee is financially responsible for any liabilities incurred by the sublessor as a direct result of the sublessee's actions or omissions that violate the sublease terms.

This indemnity clause is a standard provision in commercial leases and subleases, designed to protect the sublessor from potential liabilities caused by the sublessee's operation of the business. For example, if a customer is injured due to the sublessee's negligence (e.g., a slip-and-fall accident caused by a wet floor that wasn't properly marked), the sublessee would be responsible for covering any resulting legal claims or expenses incurred by the sublessor. Similarly, if the sublessee violates health codes or other regulations, leading to fines or penalties, the sublessee would have to indemnify the sublessor for those costs.

Prospective Crave franchisees entering into a sublease agreement should carefully review the terms of the indemnity clause and understand the scope of their potential liabilities. It is advisable to maintain adequate insurance coverage to protect against such risks. Franchisees should also ensure they operate their business in compliance with all applicable laws, regulations, and the terms of the sublease to minimize the likelihood of triggering the indemnity provision. Understanding and mitigating these risks is crucial for the financial well-being of the franchise.