Is a Fitstop franchisee responsible for indemnifying Franchisor Parties for claims arising from the franchisee's employees' actions?
Fitstop Franchise · 2024 FDDAnswer from 2024 FDD Document
the terms of this Agreement, in addition to any judgment entered in our favor, we shall be entitled to recover such reasonable attorneys' fees as may be allowed by the court together with court costs and expenses of litigation.
- 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.
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 the Franchisor Parties from claims arising from the franchisee's employees' actions. Specifically, the franchisee must hold harmless and indemnify Fitstop and its related parties from any claims arising from actions by the franchisee, the members they are servicing, or the franchisee's employees, agents, or representatives. This includes, but is not limited to, claims of employment or joint employment.
This obligation extends to any claim, demand, or penalty against the Franchisor Parties, or if they become involved in any legal or administrative proceeding due to an act or omission by the franchisee or their employees or agents. It also applies to any act occurring at the premises or related to the franchised business, or any omission related to the business or operation of the franchise. The franchisee must indemnify the Franchisor Parties against all judgments, settlements, penalties, and expenses, including attorneys' fees and court costs.
Furthermore, the Fitstop franchisee is obligated to defend the Franchisor Parties in any lawsuit based on such loss or damage and to cover all associated costs and reasonable attorneys' fees. If the Franchisor Parties choose to retain their own counsel, the franchisee must reimburse them for all reasonable costs and legal fees incurred for their defense, with timely reimbursement as fees are incurred and billed.
This indemnification clause is a significant responsibility for Fitstop franchisees. It means they are financially liable for a wide range of potential claims and legal actions related to their business operations and the actions of their employees. Prospective franchisees should carefully consider this obligation and ensure they have adequate insurance coverage and risk management strategies in place.