What is the exception to the indemnity obligation for a Desi District franchisee?
Desi_District Franchise · 2024 FDDAnswer from 2024 FDD Document
| Type of Fee | Amount | Due Date | Remarks |
|---|---|---|---|
| Indemnity | Our costs and losses from any legal action related to the operation of your franchise | On demand | You must indemnify and defend (with counsel reasonably acceptable to us) us and our affiliates against all losses in any action by or against us related to, or alleged to arise out of, the operation of your franchise (unless caused by our misconduct or negligence). |
Source: Item 6 — OTHER FEES (FDD pages 16–20)
What This Means (2024 FDD)
According to Desi District's 2024 Franchise Disclosure Document, franchisees are generally required to indemnify Desi District and its affiliates against losses from legal actions related to the operation of their franchise. This means a franchisee could be responsible for covering Desi District's legal costs and losses if a lawsuit arises from the franchisee's business operations.
However, there is an exception to this requirement. The franchisee is not required to indemnify Desi District if the losses are caused by Desi District's own misconduct or negligence. This provides a degree of protection for the franchisee, ensuring they are not held liable for issues stemming directly from the franchisor's actions.
This type of indemnity clause is common in franchise agreements. It is important for prospective Desi District franchisees to understand the scope of this obligation and the specific circumstances under which they would be required to cover the franchisor's losses. Franchisees should consult with a legal professional to fully understand their rights and responsibilities under the indemnity clause.