Does a Crave Cookies franchisee need consent from the Indemnitee to settle an Action?
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.
Source: Item 22 — CONTRACTS (FDD page 47)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, a franchisee is generally required to indemnify Crave Cookies Franchising and related parties (Indemnitees) against losses from actions related to the operation of the business. However, the franchisee is not obligated to indemnify an Indemnitee for actions resulting from the Indemnitee's intentional misconduct or negligence.
Specifically, the FDD states that a Crave Cookies franchisee cannot settle an Action without the consent of the Indemnitee. This means that if a claim is brought against Crave Cookies Franchising or its related parties due to the franchisee's business operations, the franchisee is responsible for defending and covering the losses, but any settlement of such a claim requires the Indemnitee's approval.
This requirement protects the Indemnitee's interests by ensuring they have control over the resolution of claims that could impact their reputation or financial standing. However, it also means that the franchisee cannot independently resolve a claim without the Indemnitee's agreement, potentially leading to prolonged disputes or increased costs if the parties disagree on the settlement terms.