What is excluded from the Face Foundrie franchisee's indemnification obligations to the franchisor?
Face_Foundrie Franchise · 2025 FDDAnswer from 2025 FDD Document
- 17.02 Indemnification. Franchisee agrees to indemnify Franchisor, its Affiliates and its and their respective directors, managers, officers, employees, shareholders, members, agents, successors and assigns (collectively "Indemnitees"), and to hold the Indemnitees harmless to the fullest extent permitted by law, from any and all Losses and Expenses (as defined below) incurred in connection with any litigation or other form of adjudicatory procedure, claim, demand, investigation, or formal or informal inquiry (regardless of whether it is reduced to judgment) or any settlement thereof which arises directly or indirectly from, or as a result of, a claim of a third party against any one or more of the Indemnitees in connection with the development, ownership, operation or closing of the Facial Bar or Franchisee's breach of this Agreement, and regardless of whether it resulted from any strict or vicarious liability imposed by law on the Indemnitees, provided, however, that this indemnity will not apply to any liability arising from a breach of this Agreement by the Indemnitees or the gross negligence or willful acts of the Indemnitees (except to the extent that joint liability is involved, in which event the indemnification provided herein will extend to any finding of comparative or contributory negligence attributable to Franchisee).
For purposes hereof "Losses and Expenses" includes obligations, damages (actual, consequential or otherwise) and costs reasonably incurred in the defense of any claim against any of the Indemnitees, including, without limitation, reasonable accountants', arbitrators', attorneys' and expert witness fees.
Franchisor agrees to give Franchisee reasonable notice of any event of which Franchisor becomes aware for which indemnification may be required.
Franchisor has the exclusive right to defend any such claim.
This indemnity will continue in effect after the expiration or termination of this Agreement.
Source: Item 22 — CONTRACTS (FDD pages 73–74)
What This Means (2025 FDD)
According to Face Foundrie's 2025 Franchise Disclosure Document, the franchisee's obligation to indemnify the franchisor does not apply to liability arising from a breach of the Franchise Agreement by the franchisor, or from the gross negligence or willful acts of the franchisor. However, if joint liability is involved, the franchisee's indemnification extends to any finding of comparative or contributory negligence attributable to the franchisee.
In practical terms, this means that if Face Foundrie, as the franchisor, violates the Franchise Agreement or acts with gross negligence or willful misconduct, the franchisee is not required to cover the franchisor's losses and expenses resulting from third-party claims. This protection is limited, as the franchisee may still be responsible for covering losses if they are also found to be negligent in the same matter.
The FDD specifies that "Losses and Expenses" include obligations, damages (actual, consequential, or otherwise), and costs reasonably incurred in defending against any claim, including reasonable accountants', arbitrators', attorneys', and expert witness fees. Face Foundrie will provide the franchisee with reasonable notice of any event that may require indemnification and retains the exclusive right to defend any such claim. This indemnification clause remains in effect even after the Franchise Agreement expires or terminates.
Franchise agreements commonly include indemnification clauses to protect the franchisor from liabilities arising from the franchisee's operations. The Face Foundrie agreement follows this practice but includes specific exclusions to protect the franchisee from the franchisor's own misconduct. Prospective franchisees should carefully review this section with legal counsel to understand the scope of their indemnification obligations and the circumstances under which they are protected.