Who is responsible for damages arising from the operation of the Fly Fitness franchised business?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
- 15.6 Indemnification.
TO THE FULLEST EXTENT PERMITTED BY LAW, FRANCHISEE AGREES TO EXONERATE AND INDEMNIFY AND HOLD HARMLESS FLY FITNESS FRANCHISE, L.L.C., FLY HOLDINGS, LLC, LICENSOR, AND ANY OF THESE COMPANIES' PARENT COMPANY, SUBSIDIARIES, DIVISIONS, AFFILIATES, SUCCESSORS, ASSIGNS AND DESIGNEES AS WELL AS THEIR DIRECTORS, OFFICERS, EMPLOYEES, AGENTS, SHAREHOLDERS, SUCCESSORS, DESIGNEES AND REPRESENTATIVES (COLLECTIVELY REFERRED TO AS THE "FLY FITNESS INDEMNITEES"), FROM ALL CLAIMS BASED UPON, ARISING OUT OF, OR IN ANY WAY RELATED TO THE OPERATION, CONDITION, OR ANY PART OF FRANCHISEE'S FLY FITNESS FRANCHISE, THE FRANCHISED BUSINESS, THE PRODUCTS, THE PREMISES, OR ANY ASPECT OF THE REAL ESTATE CONNECTED TO FRANCHISEE'S FRANCHISED BUSINESS, WHETHER CAUSED BY FRANCHISEE, FRANCHISEE'S AGENTS OR EMPLOYEES, OR ARISING FROM FRANCHISEE'S ADVERTISING OR BUSINESS PRACTICES.
FRANCHISEE AGREES TO PAY FOR ALL THE FLY FITNESS INDEMNITEES' LOSSES, EXPENSES (INCLUDING, BUT NOT LIMITED TO ATTORNEYS' FEES) OR CONCURRENT OR CONTRIBUTING LIABILITY INCURRED IN CONNECTION WITH ANY ACTION, SUIT, PROCEEDING, INQUIRY (REGARDLESS OF WHETHER THE SAME IS REDUCED TO JUDGMENT OR DETERMINATION), OR ANY SETTLEMENT THEREOF FOR THE INDEMNIFICATION GRANTED BY FRANCHISEE HEREUNDER.
THE FLY FITNESS INDEMNITEES SHALL HAVE THE RIGHT TO SELECT AND APPOINT INDEPENDENT COUNSEL TO REPRESENT ANY OF THE FLY FITNESS INDEMNITEES IN ANY ACTION OR PROCEEDING COVERED BY THIS INDEMNITY.
FRANCHISEE AGREES THAT TO HOLD THE FLY FITNESS INDEMNITEES HARMLESS, FRANCHISEE WILL REIMBURSE THE FLY
FITNESS INDEMNITEES AS THE COSTS AND EXPENSES ARE INCURRED BY THE FLY FITNESS INDEMNITEES.
Source: Item 22 — CONTRACTS (FDD pages 44–45)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the franchisee is primarily responsible for covering claims and losses related to the operation of their Fly Fitness franchise. Specifically, the franchisee agrees to indemnify Fly Fitness Franchise, L.L.C., Fly Holdings, LLC, Licensor, and their associated entities and personnel (referred to as the "Fly Fitness Indemnitees") against all claims arising from the operation, condition, or any aspect of the franchisee's Fly Fitness business. This includes issues related to the products, premises, or real estate connected to the franchise, regardless of whether the cause stems from the franchisee, their agents, employees, or from the franchisee's advertising or business practices.
This means that if a customer or third party brings a claim against Fly Fitness due to something that happened at the franchisee's location, or because of the franchisee's actions, the franchisee is responsible for defending and protecting Fly Fitness from that claim. The franchisee must cover all losses and expenses, including attorney's fees, incurred by Fly Fitness in connection with any related action, suit, proceeding, or settlement.
Furthermore, Fly Fitness has the right to select and appoint independent counsel to represent any of the Fly Fitness Indemnitees in any action covered by this indemnity, and the franchisee is obligated to reimburse Fly Fitness for the costs and expenses incurred. This indemnification clause places a significant financial responsibility on the franchisee, as they are liable for a wide range of potential issues that may arise from their business operations. It is common practice in franchising for franchisees to bear responsibility for their business's operations, but the breadth of this clause underscores the importance of maintaining comprehensive insurance coverage and adhering strictly to Fly Fitness's operational standards and business practices to minimize potential liabilities.