Does the Floyds 99 franchisee waive claims for damages due to wrongful injunction?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisor exercises Franchisor's Management Rights, Franchisee agrees to hold harmless Franchisor and its representatives for all actions occurring during such temporary operation.
Franchisee agrees to pay all of Franchisor's reasonable attorneys' fees and costs incurred as a consequence of Franchisor's exercise of Franchisor's Management Rights.
Nothing contained herein shall prevent Franchisor
from exercising any other right which Franchisor may have under this Agreement, including, without limitation, termination. Operation of Franchisee's FLOYD'S 99 Shop during the exercise of Franchisor's Management Rights will be on Franchisee's behalf, provided that Franchisor only has a duty to utilize its best efforts and will not be liable to Franchisee or it's owners for any debts, losses or obligations incurred by Franchisee's FLOYD'S 99 Shop or to any of Franchisee's creditors for any products, materials, supplies or services Franchisee's FLOYD'S 99 Shop purchases during the period during which Franchisor's Management Rights are being exercised.
Source: Item 22 — CONTRACTS (FDD pages 57–58)
What This Means (2025 FDD)
Based on the 2025 Floyds 99 Franchise Disclosure Document, there is no explicit mention of the franchisee waiving claims for damages resulting from a wrongful injunction. However, the document does address scenarios where the franchisee agrees to hold Floyds 99 harmless under certain conditions. Specifically, if Floyds 99 exercises its management rights over a franchise, the franchisee agrees to hold Floyds 99 harmless for actions occurring during that temporary operation. This suggests that franchisees may bear some responsibility for losses during periods when Floyds 99 is managing the shop due to the franchisee's default or inability to manage the business.
Additionally, the FDD outlines an indemnification clause where the franchisee is required to indemnify Floyds 99 against claims, obligations, and damages arising from the operation of the Floyds 99 shop or the franchisee's acts and omissions. This indemnification extends to any claims the franchisee brings against Floyds 99. While this doesn't directly address wrongful injunctions, it implies that the franchisee could be responsible for Floyds 99's legal costs if the franchisee initiates a claim that leads to such costs.
Given the absence of a direct statement about waiving claims for wrongful injunctions, it is crucial for a prospective Floyds 99 franchisee to seek clarification from the franchisor regarding their rights and responsibilities in such a situation. Understanding the specific circumstances under which a franchisee might be held responsible for damages or legal costs related to injunctions is essential for making an informed investment decision. It would be prudent to consult with a legal professional experienced in franchise law to fully assess the potential risks and liabilities associated with this aspect of the franchise agreement.