Under the Eos Worldwide franchise agreement, what losses are you NOT required to indemnify Eos Worldwide for?
Eos_Worldwide Franchise · 2025 FDDAnswer from 2025 FDD Document
- (a) You agree to indemnify, defend and hold harmless us, our affiliates and our and our affiliates' respective members, directors, officers, owners, employees, agents, contractors, advisors, successors and assignees (each an "Indemnified Party" and collectively the "Indemnified Parties") against and to reimburse each Indemnified Party for all losses, expenses, judgments, settlements, claims, liabilities, investigations, reasonable legal fees, costs (including, without limitation, expert witness fees, court costs, accounting fees, travel and living expenses) and damages arising out of any claim directly or indirectly related to the operation of your Franchise or your Franchised Business, or arising out of a breach of this Agreement or any other agreement you sign with us or any affiliate of ours in connection with your Franchise as well as any and all of your obligations to file and pay taxes described in this Agreement; provided, however, that you shall not be required to hold harmless or indemnify us for any losses relating to any claim to the extent such losses arise out of our gross negligence or willful misconduct. This indemnity will continue in full force and effect subsequent to and notwithstanding the expiration, transfer, or termination of this Agreement. Under no circumstances will we or any other Indemnified Party be required to seek recovery from any insurer or other third party, or otherwise to mitigate our, their or your losses and expenses. You agree that a failure to pursue such recovery or mitigate a loss will in no way reduce or alter the amounts we or another Indemnified Party may recover from you.
Source: Item 23 — RECEIPTS (FDD pages 74–246)
What This Means (2025 FDD)
According to Eos Worldwide's 2025 Franchise Disclosure Document, as a franchisee, you are generally required to indemnify Eos Worldwide, its affiliates, and their personnel against losses, expenses, judgments, settlements, claims, liabilities, legal fees, costs, and damages arising from the operation of your franchise, breaches of the franchise agreement, or tax obligations. This means you are responsible for covering their costs if they face legal or financial issues due to your business operations. This obligation remains even after the franchise agreement expires, is transferred, or is terminated.
However, the FDD stipulates that you are not required to indemnify Eos Worldwide for losses that arise out of Eos Worldwide's gross negligence or willful misconduct. This provides a specific exception where Eos Worldwide is directly responsible for losses due to their own actions.
Furthermore, Eos Worldwide is not obligated to seek recovery from any insurer or third party to mitigate losses, and your responsibility to indemnify them is not reduced even if they fail to pursue such recovery or mitigation. This clause places the onus on the franchisee to cover the specified losses without Eos Worldwide needing to minimize those losses through other means. This type of clause is not uncommon in franchise agreements, as franchisors seek to protect themselves from liabilities arising from the franchisee's operation of the business while also being responsible for their own actions.