Does the Eos Worldwide franchise agreement's indemnification clause extend beyond the termination or expiration of the agreement?
Eos_Worldwide Franchise · 2025 FDDAnswer from 2025 FDD Document
You will indemnify us, hold us harmless from, and defend us against any and all liabilities, losses,
expenses, and obligations that we may incur related to any of your Personnel (or any person assisting in providing the Services or Products or working on behalf of the Franchise) arising out of any claim, cause of action, complaint, proceeding (in litigation, arbitration, mediation, administrative process or otherwise) relating to your obligations to pay them any compensation or remuneration or otherwise relating to an employment relationship. You understand and acknowledge that we are under no obligation or liability to you or to any of your Personnel for any remuneration, compensation, commission, benefits, employment or any other duty, responsibility, liability or obligation. Your indemnification obligations: (i) include reimbursement to us of any and all of our legal fees and costs in defending any such claim from your Personnel, (ii) survive expiration or termination of this Agreement, and (iii) extend to our affiliates, representatives and agents.
Source: Item 23 — RECEIPTS (FDD pages 74–246)
What This Means (2025 FDD)
According to Eos Worldwide's 2025 Franchise Disclosure Document, the franchisee's indemnification obligations do indeed extend beyond the expiration or termination of the franchise agreement. Specifically, the franchisee is obligated to indemnify, hold harmless, and defend Eos Worldwide against any liabilities, losses, expenses, and obligations that Eos Worldwide may incur related to the franchisee's personnel. This includes claims, causes of action, complaints, or proceedings relating to the franchisee's obligations to pay their personnel any compensation or remuneration, or otherwise relating to an employment relationship.
This indemnification requirement includes the reimbursement of any and all legal fees and costs incurred by Eos Worldwide in defending such claims from the franchisee's personnel. The indemnification obligations explicitly survive the expiration or termination of the agreement. Furthermore, these obligations extend not only to Eos Worldwide itself but also to its affiliates, representatives, and agents.
This means that even after the franchise agreement has ended, whether through expiration or termination, the franchisee remains responsible for any liabilities arising from their management and employment of personnel during the term of the agreement. This is a significant consideration for prospective franchisees, as it creates a long-term responsibility that could potentially result in considerable financial exposure even after the franchise is no longer operating. Franchisees should ensure they maintain adequate insurance coverage and adhere to sound employment practices to mitigate this risk.
Such clauses are relatively common in franchise agreements, as franchisors seek to protect themselves from potential liabilities arising from the actions of their franchisees. However, the scope and duration of these clauses can vary, so it is important for prospective franchisees to carefully review and understand their obligations before entering into a franchise agreement. Franchisees may want to seek legal counsel to fully understand the implications of this clause and to assess their potential exposure.