Under the Degree Wellness agreement, what constitutes a breach of contract that would trigger the Licensed Provider's indemnification obligations?
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, a Licensed Provider's breach of any provision within the agreement can trigger indemnification obligations. This means the Licensed Provider is responsible for defending, indemnifying, and holding harmless the Management Company, Degree Wellness, and their respective owners, directors, officers, employees, agents, successors, and assigns from any claims, lawsuits, or costs.
More specifically, the Licensed Provider's indemnification obligations extend to damages and expenses, including actual and consequential damages, attorney's fees, accounting fees, expert witness fees, investigation costs, court costs, litigation expenses, and travel and living expenses. These expenses must be caused by, related to, or arising out of the Licensed Provider's actions or omissions, or those of their employees or agents, in connection with providing services or operating the studio.
Furthermore, indemnification is required if the Licensed Provider makes unauthorized agreements, representations, or warranties to third parties. It also applies to damages to any person or property arising from the performance of services or studio operations, regardless of whether the damages are due to negligence, willful action, failure to act, or professional malpractice.
This obligation to indemnify remains in effect even after the agreement expires, is renewed, or is terminated. Therefore, it is crucial for a prospective Degree Wellness franchisee to fully understand all terms of the agreement and to operate the business in compliance with those terms to avoid potential liabilities.