Does the Floyds 99 franchisee's indemnification obligation include claims brought by the franchisee against the Indemnified Parties?
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 the 2025 Floyds 99 Franchise Disclosure Document, the franchisee's indemnification obligations do extend to claims brought by the franchisee against the Indemnified Parties. The Indemnified Parties include Floyds 99 (the Franchisor), its subsidiaries, parents, affiliates, and their respective shareholders, equity owners, partners, directors, officers, managers, members, employees, agents, representatives, successors, and assigns.
Specifically, the FDD states that claims for indemnification include all obligations, actual and consequential damages, and costs reasonably incurred in the defense of any claim against the Indemnified Parties, including any claims the franchisee brings against them. These costs can include reasonable accountants', attorneys', and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses, and travel and living expenses.
This means that if a franchisee brings a claim against Floyds 99 or any of the other Indemnified Parties, the franchisee may be responsible for covering the legal and other costs incurred by the Indemnified Parties in defending against that claim. This is a significant obligation for the franchisee and something to consider carefully before entering into a franchise agreement with Floyds 99. Floyds 99 also retains the right to defend any claim against it.