What specific costs are included in the Fly Fitness Developer's obligation to indemnify the Franchisor?
Fly_Fitness Franchise · 2024 FDDAnswer from 2024 FDD Document
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.
Source: Item 23 — RECEIPT (FDD pages 45–182)
What This Means (2024 FDD)
According to Fly Fitness's 2024 Franchise Disclosure Document, the developer's indemnification obligations include covering Fly Fitness Indemnitees' losses and expenses. These expenses specifically include attorneys' fees. The developer is responsible for these costs when they are incurred in connection with any action, suit, proceeding, or inquiry, regardless of whether it leads to a judgment or determination. This also applies to any settlement related to the indemnification granted by the developer.
Fly Fitness retains the right to select and appoint independent counsel to represent any of the Fly Fitness Indemnitees in any action or proceeding covered by the indemnity. The developer is obligated to reimburse the Fly Fitness Indemnitees as these costs and expenses are incurred.
In simpler terms, as a Fly Fitness developer, you are responsible for protecting Fly Fitness from any claims or legal actions related to the development, operation, or condition of your Fly Fitness outlets. This protection extends to paying for Fly Fitness's legal defense, including attorney fees, and covering any losses or expenses they incur due to these claims. This obligation arises whether or not a formal judgment is made against Fly Fitness. You must reimburse Fly Fitness for these costs as they occur.