Does the indemnification obligation of the Degree Wellness Licensed Provider extend to damages arising from professional malpractice?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
- 11.1 Licensed Provider agrees to defend, indemnify and hold harmless Management Company, Degree Wellness and their respective owners, directors, officers, employees, agents, successors, and assigns (each a "Management Indemnified Party"), from and against any and all claims, lawsuits, demands, actions, causes of action or other events, and for all costs and expenses incurred by the Management Indemnified Party in connection therewith, including without limitation actual and consequential damages, reasonable attorneys', accountants', and/or expert witness fees, cost of investigation and proof of facts court costs, other litigation expenses, and travel and living expenses, to the extent caused by, relating to or otherwise arising out of (1) the effects, outcomes and consequences of Licensed Provider's acts and omissions and the acts and omissions of Licensed Provider's employees, representatives and agents in connection with or relating to the provision of the Licensed Provider Services or the operation of the Studio, (2) any agreements, representations, or warranties Licensed Provider makes to third parties that are not expressly authorized under this Agreement, (3) any damages to any person or property directly or indirectly arising out of the performance of the Licensed Provider Services or the operation of the Studio, whether or not caused by Licensed Provider's negligent or willful action or failure to act or acts or omissions deemed to be professional malpractice, and/or (4) Licensed Provider's breach of any provision of this Agreement. Degree Wellness shall be deemed to be a third party beneficiary of all of the covenants contained in this Section 11.1.
- 11.2 The indemnification obligations described in this Section 11 will continue in full force and effect after, and notwithstanding, the expiration, renewal or termination of this Agreement.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 63–66)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, the indemnification obligation of the Licensed Provider does extend to damages arising from professional malpractice. The Licensed Provider agrees to defend, indemnify, and hold harmless Degree Wellness and its affiliates from claims, lawsuits, and associated costs and expenses. This includes damages to any person or property arising from the performance of Licensed Provider Services or the operation of the studio, even if caused by the Licensed Provider's negligence, willful action, or acts or omissions deemed to be professional malpractice.
This means that as a Degree Wellness Licensed Provider, you could be held financially responsible for covering legal costs, damages, and other expenses incurred by Degree Wellness due to your actions, your employees' actions, or the actions of your representatives and agents. This responsibility extends to situations involving professional malpractice, regardless of whether it was due to negligence or intentional misconduct.
Degree Wellness is considered a third-party beneficiary of these indemnification covenants, giving them direct rights to enforce these provisions. This obligation remains in effect even after the agreement expires or is terminated. It is important for prospective franchisees to fully understand the scope of this indemnification and to secure adequate insurance coverage, including malpractice insurance, to protect themselves against potential claims.
Furthermore, the malpractice policy for each doctor providing Licensed Provider Services must name Management Company, Degree Wellness, and their respective owners, directors, employees, agents, and affiliates as an additional insured. This requirement underscores the importance Degree Wellness places on protecting itself from potential liabilities arising from the services provided by the Licensed Provider and their staff.