What costs are included in the claims that the Floyds 99 franchisee must cover under the indemnification agreement?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchisee shall indemnify, defend and hold harmless the 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, fines, suits, proceedings, demands, actions of any kind and nature, and damages described in this Section 21.3, any and all obligations described in Section 21.2 and any and all claims and liabilities directly or indirectly arising out of or is based upon or related to this Agreement, the operation of the FLOYD'S 99 Shop or arising out of all acts and omissions of the Franchisee and its employees related to labor or employment practices, failure to comply with any applicable laws or regulations, or the use of the Marks and Licensed Methods in any manner not in accordance with 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 Franchisee 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.
The Franchisor shall have the right to defend any such claim against it.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
According to Floyds 99's 2025 Franchise Disclosure Document, the franchisee is required to indemnify, defend, and hold harmless Floyds 99 and its related parties from various claims, obligations, fines, suits, proceedings, demands, actions, and damages. This includes any obligations outlined in Section 21.2 of the agreement, which primarily concerns the franchisee's responsibility for payments to third parties such as banks, lenders, government agencies, and vendors, as well as taxes levied on the franchisee or the Floyds 99 shop.
The indemnification extends to claims and liabilities arising from the franchise agreement, the operation of the Floyds 99 shop, and the acts or omissions of the franchisee and its employees related to labor or employment practices. It also covers failures to comply with applicable laws or regulations, or the misuse of Floyds 99's marks and licensed methods.
For the purposes of this indemnification, claims include all obligations, actual and consequential damages, and costs reasonably incurred in defending against any claim. This encompasses reasonable accountants', attorneys', and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses, and travel and living expenses. Floyds 99 retains the right to defend any claim made against it, meaning the franchisee could be responsible for extensive legal and financial burdens if any of these situations arise.