What is a 'Direct Claim' in the context of Dog Haus indemnification?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
The notice shall specify whether the Indemnifiable Claim arises as a result of an Indemnifiable Claim by a third party against the Indemnitees (a "Third Party Claim") or whether the Indemnifiable Claim does not result from an Indemnifiable Claim by a third party against the Indemnitees (a "Direct Claim"), and shall also specify with reasonable particularity (to the extent that the information is available) the factual basis for the Indemnifiable Claim and the amount of the Indemnifiable Claim, if known.
Source: Item 23 — RECEIPTS (FDD pages 87–328)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, a 'Direct Claim' is defined within the context of indemnification. Specifically, it refers to an 'Indemnifiable Claim' that does not arise from a third party's claim against the 'Indemnitees' (which include Dog Haus and its affiliates).
In simpler terms, if someone sues Dog Haus (or related parties), that would be a 'Third Party Claim'. However, if the 'Indemnitees' incur costs or losses for reasons other than a third-party lawsuit, and they seek indemnification (compensation) from the 'Indemnitors' (the Area Developer and related parties), that situation is classified as a 'Direct Claim'.
Dog Haus requires that the Indemnitees provide prompt notice of any Indemnifiable Claim, specifying whether it is a Third Party Claim or a Direct Claim. The notice must also include the factual basis for the claim and the amount, if known. If the Indemnitees fail to provide timely notice, the Indemnitors may be entitled to offset any losses they incur as a result of the delayed notice against the amount claimed by the Indemnitees.