What is the Desi District franchisee's obligation regarding legal counsel in an indemnity situation?
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 have specific obligations regarding legal counsel in indemnity situations. The franchisee must indemnify and defend Desi District and its affiliates against any losses from legal actions related to the operation of the franchise. This defense must be conducted with legal counsel that is reasonably acceptable to Desi District. This obligation applies to any action against Desi District that is related to, or alleged to arise out of, the operation of the Desi District franchise.
This means that if a customer sues Desi District because of something that happened at the franchisee's location, the franchisee is responsible for providing a legal defense for Desi District. The franchisor has the right to approve the attorney selected by the franchisee.
However, there is an exception: the franchisee is not responsible for these costs if the legal action is caused by Desi District's misconduct or negligence. It is important for prospective franchisees to understand this obligation and to factor in the potential costs of defending Desi District in legal actions when evaluating the franchise opportunity.