Can an Indemnitee assume the defense of an Action against a Crown Gold Exchange franchisee?
Crown_Gold_Exchange Franchise · 2024 FDDAnswer from 2024 FDD Document
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 pages 38–39)
What This Means (2024 FDD)
According to Crown Gold Exchange's 2024 Franchise Disclosure Document, an Indemnitee has the option to assume the defense of any Action related to indemnification. This means that Crown Gold Franchising can choose to take over the legal defense of a case for which the franchisee is obligated to provide indemnification.
If Crown Gold Exchange chooses to assume the defense, it will control all aspects of defending the Action, including negotiations and settlement. However, the franchisee will be responsible for covering the expenses associated with the defense. This assumption of defense by Crown Gold Exchange does not reduce the franchisee's obligation to indemnify the Indemnitees.
This clause provides Crown Gold Exchange with the ability to manage legal risks and ensure a consistent defense strategy across its franchise network. For a franchisee, it means they could lose control over their legal defense, but it also means they may benefit from the franchisor's expertise and resources in handling the matter, though at the franchisee's expense.