Does the Franchisee for Deer Solution have to personally guarantee payment of all indemnification obligations under Article 10 of the Franchise Agreement?
Deer_Solution Franchise · 2025 FDDAnswer from 2025 FDD Document
not caused by Franchisee's negligent, willful act or failure to act.
Franchisor shall have no liability for any sales, use, excise, gross receipts, property, or other taxes, whether levied upon Franchisee, the Franchised Business or its assets, or upon Franchisor in connection with sales made, services performed or business conducted by Franchisee.
10.B. INDEMNIFICATION BY FRANCHISEE
Franchisee and each Owner shall indemnify, defend through counsel acceptable to Franchisor, and hold Franchisor, Franchisor's affiliates, and their respective officers, directors, shareholders, members, owners, partners, agents, representatives, independent contractors, employees, assigns and successors (the "Franchisor Indemnified Parties") harmless from all losses, expenses, claims, causes of action, lawsuits,
liabilities, taxes, costs, demands, proceedings, investigations, hearings, and/or damages arising out of, or relating to, Franchisee's Administrative Office, and/or the Franchised Business (including, without limitation, the ownership
Source: Item 23 — RECEIPTS (FDD pages 55–246)
What This Means (2025 FDD)
According to Deer Solution's 2025 Franchise Disclosure Document, the franchisee and each owner must indemnify and defend Deer Solution, its affiliates, and their respective officers, directors, shareholders, members, owners, partners, agents, representatives, independent contractors, employees, assigns, and successors from all losses, expenses, claims, causes of action, and lawsuits. This means the franchisee is responsible for protecting Deer Solution from any legal or financial liabilities arising from the franchisee's actions or the operation of the franchised business.
Furthermore, the document indicates that if you are an owner or the spouse of an owner, you acknowledge that the agreement personally obligates you to guarantee the franchisee's obligations to Deer Solution. This includes obligations related to brand protection, confidentiality, and noncompetition restrictions. This personal guarantee is a condition for Deer Solution entering into the Franchise Agreement with the franchisee.
In practical terms, this means that not only is the franchisee's business liable for any indemnification obligations, but the franchisee and their spouse (if applicable) are also personally liable. This is a significant risk for prospective franchisees, as their personal assets could be at stake if the business incurs substantial liabilities. It is highly recommended that potential franchisees carefully review these indemnification obligations with a legal advisor to fully understand the scope of their personal liability.