Does the Face Foundrie franchisee's indemnification obligation extend to the franchisor's affiliates?
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 indemnification obligations do extend to the franchisor's affiliates. Specifically, the franchisee agrees to indemnify Face Foundrie, its affiliates, and their respective directors, managers, officers, employees, shareholders, members, agents, successors, and assigns. This indemnification covers Losses and Expenses incurred due to third-party claims related to the development, ownership, operation, or closing of the Facial Bar, or the franchisee's breach of the Franchise Agreement.
This means that a Face Foundrie franchisee could be responsible for covering the legal costs and damages incurred by Face Foundrie's affiliates if a third party brings a claim against them related to the franchisee's business or breach of contract. However, this indemnification does not apply to liability arising from a breach of the Franchise Agreement or the gross negligence or willful acts of Face Foundrie or its affiliates, except in cases of joint liability where the franchisee's comparative or contributory negligence is a factor.
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 fees for accountants, arbitrators, attorneys, and expert witnesses. Face Foundrie agrees to provide the franchisee with reasonable notice of any event that may require indemnification, and Face Foundrie retains the exclusive right to defend any such claim. This indemnification obligation remains in effect even after the Franchise Agreement expires or is terminated.
This type of clause is relatively standard in franchise agreements, as it aims to protect the franchisor and its related parties from liabilities arising from the franchisee's operations. However, it's crucial for a prospective Face Foundrie franchisee to fully understand the scope of this indemnification and to consider obtaining appropriate insurance coverage to mitigate potential risks.