Under the Crave Cookies Franchise Agreement, which article covers the franchisee's obligation to indemnify the franchisor?
Crave_Cookies Franchise · 2025 FDDAnswer from 2025 FDD Document
ARTICLE 16.INDEMNITY
- 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 9 — FRANCHISEE'S OBLIGATIONS (FDD pages 20–21)
What This Means (2025 FDD)
According to Crave Cookies's 2025 Franchise Disclosure Document, Article 16 of the Franchise Agreement outlines the franchisee's obligation to indemnify the franchisor. This means the franchisee is responsible for protecting Crave Cookies Franchising and its related entities from losses resulting from lawsuits or claims connected to the operation of the Crave Cookies business. However, the franchisee is not required to cover losses resulting from the franchisor's intentional misconduct or negligence.
The indemnity clause requires the franchisee to defend Crave Cookies Franchising against covered claims, using legal counsel acceptable to the franchisor. The franchisee cannot settle any claim without the franchisor's consent. It is important to note that the obligation to indemnify continues even after the franchise agreement ends.
Crave Cookies Franchising has the option to assume control of the defense in any claim, including negotiations and settlement, at the franchisee's expense. This does not relieve the franchisee of their duty to indemnify the franchisor. Franchisees should carefully review Article 16 with legal counsel to fully understand the scope of their indemnification obligations and potential financial exposure.