Under what circumstances is a Dq Treat licensee required to indemnify ADQ and its affiliates?
Dq_Treat Franchise · 2025 FDDAnswer from 2025 FDD Document
ein, delays in construction, construction or architectural errors or omissions, cost overruns, change orders or any consequential costs, expenses, injuries or damages arising out of or relating to any of those events or conditions, or to the actual construction of, or installation of equipment in the restaurant. ADQ will not provide construction consultation services on projects that are not under contract with, and
under the supervision and control of, a general contractor licensed to work in the city and state where the project is located. Furthermore, the Licensee understands that the scope of services to be pr
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, a licensee must indemnify American Dairy Queen Corporation (ADQ) and its affiliates under specific circumstances. The licensee is obligated to protect, indemnify, and defend ADQ and its affiliates against any claims, demands, damages, and liabilities. This obligation extends to any situation arising directly or indirectly from the franchised location, the Operating Agreement itself, or any failure by the licensee to comply with the agreement. This requirement applies regardless of whether ADQ's own actions or negligence may have contributed to the issue.
In practical terms, this means that if a customer sues Dq Treat due to an incident at the franchised location, even if ADQ had some involvement, the franchisee is responsible for covering ADQ's legal costs and any resulting damages. Similarly, if the franchisee breaches the Operating Agreement and this leads to a claim against ADQ, the franchisee must indemnify ADQ.
This indemnification clause is a significant responsibility for Dq Treat franchisees. It is important to understand the scope of this obligation and to ensure adequate insurance coverage is in place. Franchisees should consult with legal and insurance professionals to fully assess the risks and ensure they are adequately protected. The FDD also specifies that the licensee must maintain liability insurance of at least $2,000,000 per occurrence, which names ADQ and its affiliates as additional insured parties.
The Dq Treat franchisee also waives all claims against ADQ for damages to property or injuries to persons arising out of the design and/or construction of the Licensee's building.