In the Floyds 99 agreement, what does 'claims' mean for the purposes of indemnification?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
Developer shall indemnify, defend and hold harmless Franchisor, its subsidiaries, parents and affiliates, and their respective shareholders, equity owners, partners, directors, officers, managers, members, employees, agents, representatives, successors and assigns (the "Indemnified Parties"), against, and to reimburse them for all claims, obligations, damages, fines, suits, proceedings, demands or actions of any kind or nature, including reasonable attorneys' fees, from anyone whomsoever, arising or growing out of, or otherwise connected with Developer's activities, actions, or failure to act, under this Agreement, or directly or indirectly arising out of Developer's operation of the FLOYD'S 99 Shop(s) developed under this Agreement. For purposes of this indemnification, claims shall mean and include all obligations, actual and consequential damages and costs reasonably incurred in the defense of any claim against the Indemnified Parties (including any claims Developer brings against the Indemnified Parties), including, without limitation, reasonable accountants', attorneys' and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses. Franchisor shall have the right to defend any such claim against it. This indemnity shall continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 58–229)
What This Means (2025 FDD)
According to the 2025 Floyds 99 Franchise Disclosure Document, the term 'claims' within the context of indemnification is comprehensively defined. It encompasses all obligations, actual damages, consequential damages, and costs that are reasonably incurred when defending against any claim against the Indemnified Parties.
This definition extends to include, but is not limited to, reasonable fees for accountants, attorneys, and expert witnesses. It also covers the costs associated with investigating and proving facts, court costs, other litigation expenses, and travel and living expenses. This broad definition ensures that Floyds 99 is protected from a wide array of potential financial burdens arising from a franchisee's actions or inactions.
This indemnification clause means that a Floyds 99 franchisee could be responsible for covering extensive costs beyond just direct damages if a claim is brought against Floyds 99 due to the franchisee's operations. The franchisor retains the right to defend against any claim, further emphasizing the franchisee's responsibility to cover these defense costs. This indemnity remains in effect even after the franchise agreement expires or is terminated, highlighting the long-term financial responsibility of the franchisee.