Does the Face Foundrie Franchise Agreement specify that the indemnification obligation continues after the agreement's expiration or termination?
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 Franchise Agreement states that the franchisee's obligation to indemnify the franchisor extends beyond the termination or expiration of the agreement. Specifically, the franchisee must indemnify Face Foundrie, its affiliates, and their respective personnel against losses and expenses resulting from third-party claims related to the Facial Bar's development, ownership, operation, or closure, or from the franchisee's breach of the agreement. This indemnification applies regardless of any strict or vicarious liability imposed on Face Foundrie, unless the liability arises from Face Foundrie's own breach, gross negligence, or willful acts.
This means that even after the franchise agreement ends, a former Face Foundrie franchisee could still be held responsible for financial losses incurred by the franchisor due to events that occurred during the franchise term. These "Losses and Expenses" include obligations, damages, and costs, such as accounting, arbitration, legal, and expert witness fees, reasonably incurred in defending against any claim. Face Foundrie is required to provide the franchisee with reasonable notice of any event that may require indemnification and retains the exclusive right to defend any such claim.
This extended indemnification clause is a significant consideration for potential Face Foundrie franchisees. It highlights the importance of maintaining thorough records, adhering to all contractual obligations, and operating the franchise in a manner that minimizes the risk of third-party claims. Franchisees should carefully review the scope of this indemnification obligation with legal counsel to fully understand their potential long-term liabilities.