What entities are included in the definition of "Indemnitees" that Fly To Fit franchisees must indemnify?
Fly_To_Fit Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall indemnify and defend (with counsel reasonably acceptable to Fly To Fit Franchise) Fly To Fit Franchise, its parent entities, subsidiaries and affiliates, and their respective owners, directors, officers, employees, agents, successors and assignees (collectively, "Indemnitees") against all Losses in any Action by or against Fly To Fit Franchise and/or any Indemnitee directly or indirectly related to, or alleged to arise out of, the operation of the Business. Notwithstanding the foregoing, Franchisee shall not be obligated to indemnify an Indemnitee from Actions arising as a result of any Indemnitee's intentional misconduct or negligence. Any delay or failure by an Indemnitee to notify Franchisee of an Action shall not relieve Franchisee of its indemnity obligation except to the extent (if any) that such delay or failure materially prejudices Franchisee. Franchisee shall not settle an Action without the consent of the Indemnitee. This indemnity will continue in effect after this Agreement ends.
- 16.2 Assumption. An Indemnitee may elect to assume the defense of any Action subject to this indemnification, and control all aspects of defending the Action, including negotiations and settlement, at Franchisee's expense. Such an undertaking shall not diminish Franchisee's obligation to indemnify the Indemnitees.
Source: Item 22 — CONTRACTS (FDD page 44)
What This Means (2024 FDD)
According to Fly To Fit's 2024 Franchise Disclosure Document, franchisees are required to indemnify a specific group of entities and individuals, collectively referred to as "Indemnitees." This group includes Fly To Fit Franchise itself, along with its parent entities, subsidiaries, and affiliates. The indemnification extends to the respective owners, directors, officers, employees, agents, successors, and assignees of these entities. This means that a Fly To Fit franchisee could be held responsible for covering losses, damages, and legal expenses incurred by any of these parties if those losses are related to the franchisee's operation of the Fly To Fit business.
However, the franchisee's obligation to indemnify the Indemnitees is not absolute. The franchise agreement stipulates that a franchisee is not required to indemnify an Indemnitee for actions arising from the Indemnitee's intentional misconduct or negligence. This provides a degree of protection for the franchisee against being held liable for the wrongful actions of Fly To Fit or its related parties. Additionally, any delay or failure by an Indemnitee to promptly notify the franchisee of an action that may require indemnification could relieve the franchisee of their obligation, but only to the extent that the delay causes material prejudice to the franchisee's ability to defend against the action.
The Fly To Fit agreement also specifies that an Indemnitee has the option to assume control of the defense in any action subject to indemnification. If the Indemnitee chooses to do so, they can manage all aspects of the defense, including negotiations and settlement, but at the franchisee's expense. This arrangement ensures that Fly To Fit and its affiliates can control the legal strategy in cases where they are being defended at the franchisee's cost, while the franchisee still remains responsible for covering the associated expenses. This indemnity obligation remains in effect even after the franchise agreement terminates, meaning potential liabilities could extend beyond the term of the agreement.