Is the Devon Creek Franchisee required to indemnify the Franchisor from losses related to the Agreement?
Devon_Creek Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.6 Indemnification. TO THE FULLEST EXTENT PERMITTED BY LAW, FRANCHISEE AGREES TO EXONERATE AND INDEMNIFY AND HOLD HARMLESS DEVON CREEK FRANCHISE GROUP, LLC, LICENSOR, AND ANY PARENT COMPANY, SUBSIDIARIES, DIVISIONS, AFFILIATES, SUCCESSORS, ASSIGNS AND DESIGNEES AS WELL AS THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SHAREHOLDERS, SUCCESSORS, DESIGNEES AND REPRESENTATIVES, (COLLECTIVELY REFERRED TO AS THE "DEVON CREEK INDEMNITEES"), FROM ALL CLAIMS BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATED TO THE OPERATION, CONDITION, OR ANY PART OF FRANCHISEE'S DEVON CREEK FRANCHISE, THE FRANCHISED BUSINESS, THE SERVICES OR PRODUCTS, THE FRANCHISED BUSINESS OFFICE LOCATION, OR ANY ASPECT OF THE REAL ESTATE CONNECTED TO FRANCHISEE'S FRANCHISED BUSINESS, WHETHER CAUSED BY FRANCHISEE, FRANCHISEE'S AGENTS OR EMPLOYEES, OR ARISING FROM FRANCHISEE'S ADVERTISING OR BUSINESS PRACTICES. FRANCHISEE AGREES TO PAY FOR ALL THE DEVON CREEK INDEMNITEES' LOSSES, EXPENSES (INCLUDING, BUT NOT LIMITED TO ATTORNEYS' FEES) OR CONCURRENT OR CONTRIBUTING LIABILITY INCURRED IN CONNECTION WITH ANY ACTION, SUIT, PROCEEDING, INQUIRY (REGARDLESS OF WHETHER THE SAME IS REDUCED TO JUDGMENT OR DETERMINATION), OR ANY SETTLEMENT THEREOF FOR THE INDEMNIFICATION GRANTED BY FRANCHISEE HEREUNDER. THE DEVON CREEK INDEMNITEES SHALL HAVE THE RIGHT TO SELECT AND APPOINT INDEPENDENT COUNSEL TO REPRESENT ANY OF THE DEVON CREEK INDEMNITEES IN ANY ACTION OR PROCEEDING COVERED BY THIS INDEMNITY. FRANCHISEE AGREES THAT
Source: Item 22 — CONTRACTS (FDD page 45)
What This Means (2024 FDD)
According to Devon Creek's 2024 Franchise Disclosure Document, the franchisee is required to indemnify Devon Creek Franchise Group, LLC. The franchisee agrees to exonerate, indemnify, and hold harmless Devon Creek Franchise Group, LLC, Licensor, and any parent company, subsidiaries, divisions, affiliates, successors, assigns, and designees, as well as their directors, officers, employees, agents, shareholders, successors, designees, and representatives from all claims. These claims must be based upon, arise out of, or in any way relate to the operation, condition, or any part of the franchisee's Devon Creek franchise. This includes the franchised business, the services or products, the franchised business office location, or any aspect of the real estate connected to the franchisee's franchised business, whether caused by the franchisee, the franchisee's agents or employees, or arising from the franchisee's advertising or business practices.
The franchisee also agrees to pay for all the Devon Creek Indemnitees' losses and expenses, including attorneys' fees, or concurrent or contributing liability incurred in connection with any action, suit, proceeding, or inquiry, regardless of whether it is reduced to judgment or determination, or any settlement thereof for the indemnification granted by the franchisee. The Devon Creek Indemnitees have the right to select and appoint independent counsel to represent any of them in any action or proceeding covered by this indemnity.
This indemnification clause means that a Devon Creek franchisee could be financially responsible for a wide range of claims and losses incurred by the franchisor and related parties due to the franchisee's business operations. This is a standard clause in many franchise agreements, but it's crucial for prospective franchisees to understand the scope of their potential liability and to ensure they have adequate insurance coverage to protect themselves.