What happens if a Floyds 99 franchisee defaults on payments to third parties?
Floyds_99 Franchise · 2025 FDDAnswer from 2025 FDD Document
- 21.2 Payment of Other Obligations.
The Franchisor shall have no liability for the Franchisee's obligations to pay any third parties, including without limitation, banks, other lenders, government agencies, any product vendors, or any sales, use, service, occupation, excise, gross receipts, income, property or other tax levied upon the Franchisee, the Franchisee's property, the FLOYD'S 99 Shop or upon the Franchisor in connection with the sales made or business conducted by the Franchisee (except any taxes the Franchisor is required by law to collect from the Franchisee with respect to purchases from the Franchisor).
In addition, the Franchisor shall not be liable for any claims arising from labor or employment law violations committed by the Franchisee or its employees.
- 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 the 2025 Floyds 99 Franchise Disclosure Document, Floyds 99 is not liable for the franchisee's obligations to third parties. These third parties include banks, lenders, government agencies, and product vendors. This also extends to any sales, use, service, occupation, excise, gross receipts, income, property or other tax levied upon the Franchisee. The franchisee is solely responsible for these payments.
Furthermore, Floyds 99 is not liable for claims arising from labor or employment law violations committed by the franchisee or their employees. The franchisee is responsible for adhering to all labor and employment laws.
To protect Floyds 99 from potential liabilities arising from the franchisee's actions, the franchisee must indemnify, defend, and hold harmless Floyds 99 and its affiliates against all claims, obligations, fines, suits, proceedings, demands, and actions related to the franchise agreement, the operation of the Floyds 99 shop, or the franchisee's acts and omissions. This indemnification covers all damages and costs, including attorney's fees, incurred in defending against any claims. Floyds 99 retains the right to defend any such claim against it.