What does the Floyds 99 franchise agreement require the franchisee to do in regards to indemnifying the franchisor?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
- 21.3 Indemnification.
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 the franchisor, its subsidiaries, parents, affiliates, and their respective shareholders, equity owners, partners, directors, officers, managers, members, employees, agents, representatives, successors, and assigns (collectively known as the "Indemnified Parties"). This indemnification covers all claims, obligations, fines, suits, proceedings, demands, actions of any kind and nature, and damages described in Section 21.3 of the franchise agreement. It also extends to all obligations described in Section 21.2 and any claims and liabilities directly or indirectly arising out of or based upon the agreement, the operation of the Floyds 99 shop, or the acts and omissions of the franchisee and its employees related to labor or employment practices. This also includes failure to comply with applicable laws or regulations, or the use of the Marks and Licensed Methods in any manner not in accordance with the agreement.
For the purposes of this indemnification, claims include all obligations, actual and consequential damages, and costs reasonably incurred in defending any claim against the Indemnified Parties. This encompasses any claims the franchisee brings against the Indemnified Parties, including 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 against it. This means that while the franchisee is responsible for covering the costs and liabilities associated with certain claims, Floyds 99 has the authority to control the legal defense. This clause is significant for prospective franchisees as it outlines their potential financial responsibility for legal and other claims related to their business operations and relationship with the franchisor.