Who are the Indemnitees that the Ella Cafe Developer must indemnify and hold harmless?
Ella_Cafe Franchise · 2024 FDDAnswer from 2024 FDD Document
breach of this Agreement; and/or Developer's development of the Coffee House including, but not limited to, claims arising out of or as a result of the maintenance and operation of vehicles or the Location (collectively, "event"), and regardless of whether the losses and expenses resulted from any strict or vicarious liability imposed by law on the Indemnitees. For the purpose of this Section 7.2., "losses and expenses" will be deemed to include compensatory, exemplary, or punitive damages; fines and penalties; attorneys' fees; experts' fees; court costs; costs associated with investigating and defending against claims; settlement amounts; judgments; compensation for damages to Franchisor's reputation and goodwill; and all other costs associated with any of the foregoing losses and expenses. Under no circumstances will Franchisor be required or obligated to seek recovery from third parties or otherwise mitigate its losses in order to maintain a claim under this provision, and Franchisor's failure to seek such recovery or mitigate its loss will in no way reduce the amounts recoverable by Franchisor under this provision. Developer must give Franchisor prompt notice of any event of which Franchise is aware, or becomes aware, for which indemnification is required, and, at Developer's expense and risk, Franchisor may elect to assume (but under no circumstance is obligated to undertake) the defense and/or settlement thereof, provided that Franchisor will seek Developer's advice and counsel. Any assumption by Franchisor will not modify Developer's indemnification obligations. Franchisor may, in its sole and absolute discretion, take such actions as it seems necessary and appropriate to investigate, defend, or settle any clam or event; or take other remedial or corrective actions with respect thereof as may be, in Franchisor's sole and absolute discretion, necessary for the protection of the Indemnitees or the System. This provision survives termination or expiration of this Agreement.
Source: Item 23 — RECEIPTS (FDD pages 50–181)
What This Means (2024 FDD)
According to Ella Cafe's 2024 Franchise Disclosure Document, the Developer is responsible for indemnifying the Indemnitees. The document specifies that the Developer must indemnify the Indemnitees against losses and expenses resulting from various events, including breach of the agreement and the Developer's operation of the Coffee House. These losses and expenses encompass compensatory, exemplary, or punitive damages; fines and penalties; attorneys' fees; experts' fees; court costs; costs associated with investigating and defending against claims; settlement amounts; judgments; compensation for damages to Ella Cafe's reputation and goodwill; and all other associated costs.
The FDD states that Ella Cafe is not obligated to seek recovery from third parties or mitigate its losses to maintain a claim under this provision, and failure to do so will not reduce the amounts recoverable by Ella Cafe. The Developer is required to promptly notify Ella Cafe of any event requiring indemnification. Ella Cafe may elect to assume the defense and/or settlement of the claim, but is not obligated to do so, and any assumption by Ella Cafe does not modify the Developer's indemnification obligations.
Ella Cafe retains the discretion to take actions necessary to investigate, defend, or settle any claim or event, or take other remedial or corrective actions for the protection of the Indemnitees or the System. This indemnification provision survives the termination or expiration of the agreement. The specific identity of the Indemnitees is not explicitly defined in the provided excerpt, but the context suggests it includes Ella Cafe and potentially related parties.
Prospective Ella Cafe developers should seek clarification from the franchisor regarding the specific entities or individuals included in the definition of "Indemnitees" to fully understand the scope of their indemnification obligations. Understanding the full extent of these obligations is crucial for assessing the financial risks associated with the franchise.