Does the Fitstop franchisee have to indemnify Fitstop for claims arising from actions by the franchisee's employees?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
- 17.2 You agree to be solely responsible for the services and results of services performed at locations where services are performed by you and to hold harmless and indemnify us, including our officers, directors, trustees, shareholders, heirs, executors, administrators, attorneys, successors, assigns, principals, agents, servants, employees, consultants, representatives, parents, owners, brokers, affiliates, subsidiaries, and related entities ("Franchisor Parties"), from any and all claims arising from actions by you, the members you are servicing, or your employees, agents, or representatives including, but not limited to, claims of employment or joint employment.
- ©2024 Fitstop USA, Inc. 17.3 If Franchisor Parties shall be subject to any claim, demand, or penalty or become a party to any suit or other judicial or administrative proceeding by reason of any claimed act or omission by you
or your employees or agents, or by reason of any act occurring at the Premises or in connection with the Franchised Business, or by reason of an omission with respect to the business or operation of the Franchise, you shall indemnify and hold Franchisor Parties harmless against all judgments, settlements, penalties, and expenses, including attorneys' fees, court costs, and other expenses of litigation or administrative proceeding, incurred by or imposed on Franchisor Parties in connection with the investigation or defense relating to such claim, litigation, or administrative proceeding.
17.4 In connection with your agreement to indemnify and hold harmless Franchisor Parties, you agree to defend Franchisor Parties named in any lawsuit based on such loss or damage and to pay all costs and reasonable attorneys' fees associated with such defense. If any of the Franchisor Parties wishes to retain their own counsel to defend any such action, you agree to reimburse the Franchisor Parties for all reasonable costs and legal fees incurred by the Franchisor Parties for such defense. Said reimbursement shall be made in a timely manner as such fees are incurred and billed to you.
Source: Item 23 — RECEIPTS (FDD pages 50–135)
What This Means (2024 FDD)
According to Fitstop's 2024 Franchise Disclosure Document, the franchisee is responsible for indemnifying Fitstop against claims arising from the actions of the franchisee, their members, or their employees. This means the Fitstop franchisee agrees to protect Fitstop and its related parties from any claims, losses, or liabilities resulting from the franchisee's business operations. This includes claims related to employment or joint employment.
Specifically, the franchisee must hold Fitstop harmless from any claims, demands, or penalties resulting from any action or omission by the franchisee, their employees, or agents. This extends to any act occurring at the premises or in connection with the franchised business. The franchisee's indemnification responsibilities cover all judgments, settlements, penalties, and expenses, including attorney's fees and court costs, incurred by Fitstop in connection with any related investigation, litigation, or administrative proceeding.
The Fitstop franchisee also agrees to defend Fitstop in any lawsuit based on such loss or damage and to cover all associated costs and reasonable attorney's fees. If Fitstop chooses to retain its own counsel, the franchisee is obligated to reimburse Fitstop for all reasonable costs and legal fees incurred for such defense in a timely manner as the fees are billed.
This type of indemnification clause is standard in franchise agreements. It shifts the responsibility for potential liabilities from Fitstop to the franchisee, who is in direct control of the daily operations and staff. Prospective Fitstop franchisees should carefully consider the potential costs associated with such indemnification obligations and ensure they have adequate insurance coverage to mitigate these risks.