In the Dq Treat agreement, what constitutes 'Claims' for indemnification purposes?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
EACH PARTY (AN "INDEMNITOR") WILL INDEMNIFY, DEFEND AND HOLD HARMLESS THE OTHER PARTY, ITS AFFILIATES, AND EACH OF THEIR RESPECTIVE OFFICERS, DIRECTORS, EMPLOYEES, AND AGENTS (TOGETHER, AN "INDEMNITEE") FROM AND AGAINST ANY DAMAGES, LOSSES, FINES, PENALTIES, COSTS, EXPENSES, LIABILITIES, AND OTHER AMOUNTS (INCLUDING REASONABLE ATTORNEYS' FEES AND COSTS) (COLLECTIVELY, "CLAIMS") INCURRED OR SUFFERED BY THE INDEMNITEE IN CONNECTION WITH OR OTHERWISE RELATING TO ANY THIRD PARTY CLAIM OR ARISING OUT OF (I) ITS GROSSLY NEGLIGENT ACTS OR OMISSIONS, OR WILLFUL MISCONDUCT IN PERFORMING UNDER THIS AGREEMENT; OR (II) ALLEGATIONS THAT ANY OF PUNCHH'S PLATFORM OR SERVICES OR DOCUMENTATION INFRINGES ANY INTELLECTUAL PROPERTY RIGHT OF A THIRD PARTY IN THE TERRITORY AS FURTHER SUBJECT TO SECTIONS 14.1 AND 14.1.I BELOW; OR (III) ANY INDEMNIFICATION OBLIGATION OF A SUBCONTRACTOR; OR (IV) A DATA BREACH CAUSED BY PUNCHH; OR (V) BREACH OF APPLICABLE LAW.
Source: Item 17 — The following paragraph is added to the end of Item 17 of the Disclosure Document: (FDD pages 70–378)
What This Means (2025 FDD)
According to the 2025 Dq Treat FDD, 'Claims' in the context of indemnification are defined as damages, losses, fines, penalties, costs, expenses, liabilities, and other amounts, including reasonable attorneys' fees and costs. These claims must be incurred or suffered by the indemnitee (the party being protected) in connection with or relating to any third-party claim.
Specifically, Dq Treat franchisees may face indemnification claims arising from (i) grossly negligent acts or omissions, or willful misconduct in performing under the agreement; (ii) allegations that Punchh's platform, services, or documentation infringes any intellectual property right of a third party; (iii) any indemnification obligation of a subcontractor; (iv) a data breach caused by Punchh; or (v) breach of applicable law.
The Dq Treat agreement stipulates that the party seeking indemnification must provide prompt notice of any claim to the indemnitor (the party providing protection) and grant the indemnitor control over the defense or settlement of the claim, provided that the indemnitor may not agree to any settlement other than monetary damages. The indemnitee must also cooperate fully with the indemnitor in the defense or settlement of any such claim, at the indemnitor's reasonable expense.
This indemnification clause is a standard provision in franchise agreements, designed to allocate risk and protect parties from potential liabilities arising from specific actions or events related to the franchise operation. Prospective Dq Treat franchisees should carefully review this section to understand the scope of their indemnification obligations and rights.