What entities are included in the definition of "Indemnitees" that Crave Cookies franchisees must indemnify?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
- 16.1 Indemnity. Franchisee shall indemnify and defend (with counsel reasonably acceptable to Crave Cookies Franchising) Crave Cookies Franchising, its parent entities, subsidiaries and affiliates, and their respective owners, directors, officers, employees, agents, successors and assignees (collectively, "Indemnitees") against all Losses in any Action by or against Crave Cookies Franchising and/or any Indemnitee directly or indirectly related to, or alleged to arise out of, the operation of the Business. Notwithstanding the foregoing, Franchisee shall not be obligated to indemnify an Indemnitee from Actions arising as a result of any Indemnitee's intentional misconduct or negligence. Any delay or failure by an Indemnitee to notify Franchisee of an Action shall not relieve Franchisee of its indemnity obligation except to the extent (if any) that such delay or failure materially prejudices Franchisee. Franchisee shall not settle an Action without the consent of the Indemnitee. This indemnity will continue in effect after this Agreement ends.
- 16.2 Assumption. An Indemnitee may elect to assume the defense of any Action subject to this indemnification, and control all aspects of defending the Action, including negotiations and settlement, at Franchisee's expense. Such an undertaking shall not diminish Franchisee's obligation to indemnify the Indemnitees.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, franchisees are required to indemnify a group of entities referred to as "Indemnitees." This group includes Crave Cookies Franchising itself, along with its parent entities, subsidiaries, and affiliates. The definition extends to the respective owners, directors, officers, employees, agents, successors, and assignees of these entities.
This means that a Crave Cookies franchisee is responsible for protecting these individuals and entities from losses resulting from the operation of the franchise. However, the franchisee is not obligated to indemnify an Indemnitee from actions arising as a result of any Indemnitee's intentional misconduct or negligence. This exception provides some protection to the franchisee against being held liable for the intentional wrongdoing or negligence of the Indemnitees themselves.
The franchise agreement also stipulates that any delay or failure by an Indemnitee to notify the franchisee of an action will only relieve the franchisee of their indemnity obligation if the delay or failure materially prejudices the franchisee. Furthermore, the franchisee cannot settle an action without the consent of the Indemnitee, giving the Indemnitee control over the resolution of claims. This indemnity obligation remains in effect even after the franchise agreement ends, highlighting the long-term responsibility of the franchisee.
An Indemnitee has the option to assume the defense of any action subject to indemnification, controlling all aspects of the defense, including negotiations and settlement, at the franchisee's expense. This assumption of defense does not reduce the franchisee's obligation to indemnify the Indemnitees. This clause gives Crave Cookies Franchising significant control over the handling of legal claims related to the franchisee's business operations, potentially increasing the financial burden on the franchisee.