What specific costs are included in the Fly Fitness Developer's indemnification of the Franchisor?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
UT OF, OR IN ANY WAY RELATED TO THE DEVELOPMENT, OPERATION, CONDITION, OR ANY PART OF ANY OF DEVELOPER'S FLY FITNESS OUTLETS TO BE DEVELOPED HEREUNDER, THE PRODUCTS, THE PREMISES, OR ANY ASPECT OF THE REAL ESTATE CONNECTED TO ANY OF SUCH FLY FITNESS OUTLETS, WHETHER CAUSED BY DEVELOPER'S AGENTS OR EMPLOYEES, OR ARISING FROM DEVELOPER'S ADVERTISING OR BUSINESS PRACTICES. DEVELOPER 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 DEVELOPER 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. DEVELOPER AGREES THAT TO HOLD THE FLY FITNESS INDEMNITEES HARMLESS, DEVELOPER WILL REIMBURSE THE FLY FITNESS INDEMNITEES AS THE COSTS AND EXPENSES ARE INCURRED BY THE FLY FITNESS INDEMNITEES.
_____ Initial
10. DISPUTE RESOLUTION.
- 10.1 Internal Dispute Resolution. Developer shall first bring any claim, controversy or dispute arising out of or relating to this Agreement, the Exhibits and/or Attachments hereto or the relationship created by this Agreement to Franchisor's president and/or chief executive officer for resolution. After providing notice as set forth in Section 12.7 below.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the developer agrees to indemnify the franchisor against various costs. This indemnification means the developer is responsible for protecting Fly Fitness from losses, expenses, and liabilities related to the developer's Fly Fitness outlets.
The developer's indemnification includes covering all of Fly Fitness's losses, expenses (specifically mentioning attorneys' fees), or any concurrent or contributing liability. These costs can arise from any action, suit, proceeding, or inquiry, regardless of whether it results in a judgment or settlement. Fly Fitness has the right to choose and appoint its own independent counsel to represent them in any action covered by this indemnity.
In practical terms, this means that if a claim, demand, tax, cost, or judgment is made against Fly Fitness due to the developer's actions or the operation of their Fly Fitness outlets, the developer is responsible for covering all associated costs. This includes not only direct damages or judgments but also all legal fees and expenses Fly Fitness incurs in defending against such claims. The developer must reimburse Fly Fitness as these costs and expenses are incurred.
This requirement protects Fly Fitness from financial liabilities resulting from the developer's business practices, advertising, or any issues related to the development, operation, or condition of the Fly Fitness outlets. Prospective developers should carefully consider this indemnification clause and ensure they have adequate insurance and resources to cover potential claims and liabilities.