Under what circumstances does the indemnification clause in the Dog Haus franchise agreement NOT apply?
Dog_Haus Franchise · 2025 FDDAnswer from 2025 FDD Document
hts of termination under this Agreement or shall require longer notice periods than those set forth above, this Agreement shall be deemed amended to conform to the minimum notice periods
or restrictions upon termination required by that Applicable Law. Franchisor shall not, however, be precluded from contesting the validity, enforceability or application of Applicable Laws in any action, hearing or dispute relating to this Agreement or the termination of this Agreement.
- 16.7 Interim Management. To protect the Dog Haus System, the Dog Haus Marks, the Dog Haus Trade Secrets and the goodwill associated with the same, after Franchisor has given Franchisee written notice that Franchisee is in Default, Franchisor may (but is not obligated to) assume interim management of the Franchised Restaurant during the pendency of any cure period or in lieu of immediately terminating this Agreement. If Franchisor elects to assume interim management of the Franchi
Source: Item 22 — CONTRACTS (FDD page 87)
What This Means (2025 FDD)
According to Dog Haus's 2025 Franchise Disclosure Document, the indemnification clause within the franchise agreement has a specific exception related to interim management. If Dog Haus assumes interim management of a franchised restaurant due to the franchisee's default, the franchisee typically agrees to indemnify and hold Dog Haus harmless from any claims, demands, judgments, fines, losses, liabilities, costs, settlement amounts, and reasonable expenses, including attorney's fees, that Dog Haus incurs during this period.
However, this indemnification does not apply if the claims, demands, judgments, fines, losses, liabilities, costs, settlement amounts, and reasonable expenses arise solely from the gross negligence or willful misconduct of Dog Haus. This means that while the franchisee is generally responsible for covering Dog Haus's losses during interim management, Dog Haus is accountable for its own actions if they constitute gross negligence or willful misconduct.
For a prospective Dog Haus franchisee, this is an important distinction. It clarifies that while they are expected to protect Dog Haus from liabilities during interim management, this protection does not extend to situations where Dog Haus itself is grossly negligent or engages in willful misconduct. This clause aims to balance the responsibilities between the franchisee and franchisor during a challenging period of interim management, ensuring that each party is accountable for their own actions.