Under the Degree Wellness franchise agreement, what is an 'Indemnified Party'?
Degree_Wellness Franchise · 2025 FDDAnswer from 2025 FDD Document
Notwithstanding the existence of such insurance, you are and will be responsible for all loss or damage and contractual liability to third persons originating from or in connection with the operation of the Franchise, and for all claims or demands for damages to property or for injury, illness or death of persons directly or indirectly resulting therefrom; and you agree to defend, indemnify and hold us harmless of, from, and with respect to any such claims, loss or damage, which indemnity shall survive the termination or expiration and non-renewal of this Agreement.
Source: Item 23 — Receipts (FDD pages 66–257)
What This Means (2025 FDD)
According to Degree Wellness's 2025 Franchise Disclosure Document, an indemnified party refers to the party that is held harmless from any claims, losses, or damages. In the context of the franchise agreement, the franchisee agrees to defend, indemnify, and hold Degree Wellness harmless from any claims, loss, or damage originating from the operation of the franchise. This obligation extends to claims or demands for damages to property or for injury, illness, or death of persons directly or indirectly resulting from the franchisee's operations. This indemnification survives the termination, expiration, or non-renewal of the franchise agreement.
This means that as a Degree Wellness franchisee, you are responsible for all losses, damages, and contractual liabilities to third parties that arise from your franchise's operation. This includes any claims related to property damage, personal injury, illness, or death. Even if Degree Wellness has its own insurance coverage, your obligation to indemnify them remains in effect. You are advised to consult with your own insurance agents, brokers, and attorneys to determine the appropriate types and levels of insurance coverage you need, in addition to what Degree Wellness requires.
The franchisor's requirement for franchisees to indemnify them is a common practice in franchising. It protects the franchisor from liabilities arising from the franchisee's business operations. However, the franchisee bears the ultimate responsibility for managing risks and securing adequate insurance coverage to meet these potential obligations. The franchisee's duty to indemnify Degree Wellness continues even after the franchise agreement ends, highlighting the long-term implications of this clause.
Therefore, prospective Degree Wellness franchisees should carefully consider the scope of this indemnification clause and ensure they have sufficient insurance coverage and risk management strategies in place to protect themselves from potential liabilities. Understanding this obligation is crucial for assessing the overall financial and legal risks associated with operating a Degree Wellness franchise.