Under what circumstances is a Degree Wellness party not liable to the other party regarding indemnification claims?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
Each party shall indemnify, defend and hold harmless the other party from any and all liability, loss, claim, lawsuit, injury, cost, damage or expense whatsoever (including reasonable attorneys' fees and court costs) arising out of, incident to or in any manner occasioned by the performance or nonperformance of any duty or responsibility under this Agreement by such indemnifying party, or any of its employees, agents, contractors or subcontractors; provided, however, that neither party shall be liable to the other party hereunder for any claim covered by insurance, except to the extent that the
liability of such party exceeds the amount of such insurance coverage. For the avoidance of doubt, all financial liabilities incurred by Staffer on behalf of Group shall remain the sole obligations of Group.
Source: Item 20 — OUTLETS AND FRANCHISEE INFORMATION (FDD pages 63–66)
What This Means (2025 FDD)
According to the 2025 Degree Wellness Franchise Disclosure Document, regarding general indemnification, neither party is liable to the other for any claim covered by insurance, except if the liability exceeds the amount of such insurance coverage. This means that if a claim arises that is covered by an insurance policy held by either the franchisee or Degree Wellness, the indemnification obligations are limited to the extent that the insurance coverage falls short of fully covering the liability.
This provision encourages franchisees to maintain adequate insurance coverage, as it limits their exposure to indemnification claims to the extent they are insured. It also clarifies that financial liabilities incurred by the Staffer on behalf of the Group remain the sole obligations of the Group, ensuring that financial responsibilities are clearly defined between the parties.
For a prospective Degree Wellness franchisee, this means understanding the required and recommended insurance coverages is crucial. Franchisees should consult with insurance professionals to ensure they have sufficient coverage to protect themselves from potential liabilities and indemnification claims, as any uncovered amounts would be their responsibility. This clause aims to allocate risk efficiently, relying on insurance as the primary means of covering potential claims, with indemnification serving as a secondary layer of protection for liabilities exceeding insurance limits.