What is the impact on the Focalpoint Coaching franchisee's indemnification obligation if the Indemnified Party fails to mitigate their losses?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
This indemnity will continue in full force and effect subsequent to and notwithstanding this Agreement's expiration or termination. An Indemnified Party need not seek recovery from any insurer or other third party, or otherwise mitigate its or their losses and expenses, in order to maintain and recover from third parties fully a claim against Franchisee under this subparagraph. Franchisee agrees that a failure to pursue a recovery or mitigate a loss will not reduce or alter the amounts that an Indemnified Party may recover from Franchisee under this subparagraph.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to Focalpoint Coaching's 2025 Franchise Disclosure Document, a failure by an Indemnified Party to mitigate losses will not reduce or alter the amounts that the Indemnified Party may recover from the franchisee under the indemnification clause. This means that even if the Indemnified Party (which includes Focalpoint Coaching itself or related parties) could have taken steps to minimize their losses or expenses, the franchisee remains fully responsible for covering the entire claim.
This aspect of the franchise agreement places a significant financial burden on the Focalpoint Coaching franchisee. The franchisee is essentially responsible for the full extent of the damages or costs incurred by the Indemnified Party, regardless of whether those damages or costs could have been lessened through reasonable efforts. The franchisee is responsible for covering claims, including all obligations, actual or consequential damages, and costs the Indemnified Party reasonably incurs. These costs include accountants', attorneys', and expert witness fees, costs of investigation, court costs, and other litigation expenses.
For a prospective Focalpoint Coaching franchisee, this underscores the importance of understanding the scope of the indemnification clause and the potential financial risks involved. It would be prudent to seek legal counsel to fully assess this obligation and to explore options for mitigating this risk, such as insurance coverage or negotiating modifications to the indemnification terms. The franchisee should also be aware that this indemnity continues even after the agreement expires or terminates.