Does the Expense Reduction Analysts indemnification clause extend to Data Security Events?
Expense_Reduction_Analysts Franchise · 2025 FDDAnswer from 2025 FDD Document
You, as a material part of the consideration to be rendered to the Franchisor, agree to indemnify, defend and hold the Franchisor, as well as the Franchisor's directors, officers, principals/owners, managers, shareholders, affiliates, subsidiaries, employees, servants, agents, successors and assignees (collectively, the "Indemnitees"), harmless from and against any and all losses, damage, claims, demands, liabilities (including without limitation, economic loss and loss of profit (direct and indirect), indirect loss or consequential loss) and any Data Security Event, and causes of actions of every kind or character and nature, as well as costs and expenses incident thereto (including reasonable attorneys' fees and court costs), that are brought against any of the Indemnities (collectively, the "Claims") that arise out of or are otherwise related to (i) Your breach or attempted breach of, or misrepresentation under, this Agreement, (ii) Your obligations to any Regional Franchisee, Your taxes or liabilities of the Business, any negligent or willful act or omission by You, Your employees, agents, servants, contractors or others for whom You are legally responsible, or any warranty, promise or representation made by You or by any employee, agent, or other person acting on Your behalf, and (iii) any other operation, ownership, and/or management of the Business. Notwithstanding the foregoing, at the Franchisor's
option, the Franchisor may choose to engage counsel and defend against any such Claim and may require immediate reimbursement from You of all expenses and fees incurred in connection with such defense. Notwithstanding the foregoing, this Section 31.1 shall not apply to any Claims to the extent such Claims are found to arise out of (i) Franchisor's breach of this Agreement, or (ii) Franchisor's intentional misconduct.
Source: Item 23 — RECEIPTS (FDD pages 58–215)
What This Means (2025 FDD)
According to Expense Reduction Analysts' 2025 Franchise Disclosure Document, the indemnification clause does extend to Data Security Events.
As a franchisee, you agree to indemnify, defend, and hold harmless Expense Reduction Analysts and its associated parties from any losses, damages, claims, liabilities, and causes of action. This includes economic loss, loss of profit, indirect or consequential loss, and any Data Security Event. These claims arise from your breach of the agreement, obligations to any Regional Franchisee, your business's taxes or liabilities, any negligent or willful act or omission by you or your employees, or any warranty made by you.
Expense Reduction Analysts has the option to engage counsel and defend against any claim, requiring immediate reimbursement from you for all expenses and fees incurred. However, this indemnification does not apply to claims arising from Expense Reduction Analysts' breach of the agreement or intentional misconduct.
This means that as an Expense Reduction Analysts franchisee, you are responsible for covering the costs associated with various claims and liabilities, including those related to data security, unless they are a direct result of the franchisor's actions. Franchisees should carefully consider the scope of this indemnification and ensure they have adequate insurance and security measures in place to mitigate potential risks.