What is the scope of the Focalpoint Coaching franchisee's obligation to indemnify regarding damages, including actual and consequential?
Focalpoint_Coaching Franchise · 2025 FDDAnswer from 2025 FDD Document
demnified Parties with the defense of any such claim, and to reimburse the Indemnified Parties for all of their costs and expenses in defending any such claim, including court costs and reasonable attorneys' fees, within ten (10) days of the date of each invoice delivered by the Indemnified Parties to Franchisee enumerating such costs, expenses and attorneys' fees.
For purposes of this indemnification, "claims" include all obligations, damages (actual, consequential, or otherwise), and costs that any Indemnified Party reasonably incurs in defending any claim against it, including, without limitation, reasonable accountants', arbitrators', attorneys', and expert witness fees, costs of investigation and proof of facts, court costs, travel and living expenses, and other expenses of litigation, arbitration, or alternative dispute resolution, regardless of whether litigation, arbitration, or alternative dispute resolution is commenced. Each Indemnified Party may defend any claim against it at Franchisee's expense and agree to settlements or take any other remedial, corrective, or other actions.
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. Franchisee's or any of the other Indemnified Parties' undertaking of defense and/or settlement will in no way diminish Franchisee's obligation to indemnify Franchisor and the other Indemnified Parties and to hold Franchisor and any of the Indemnified Parties harmless.
17. ENFORCEMENT.
A. SEVERABILITY AND SUBSTITUTION OF VALID PROVISIONS.
Except as expressly provided to the contrary in this Agreement, each section, paragraph, term, and provision of this Agreement is severable, and if, for any reason, any part is held to be invalid or contrary to or in conflict with any applicable present or future law or regulation in a final, unappealable ruling issued by any court, agency, or tribunal with competent jurisdiction,
that ruling will not impair the operation of, or otherwise affect, any other portions of this Agreement, which will continue to have full force and effect and bind the parties.
If any covenant which restricts competitive activity is deemed unenforceable by virtue of its scope in terms of area, business activity prohibited, and/or length of time, but would be enforceable if modified, Franchisee and Franchisor agree that the covenant will be enforced to the fullest extent permissible under the laws and public policies applied in the jurisdiction whose law determines the covenant's validity.
Source: Item 22 — Contracts (FDD pages 56–57)
What This Means (2025 FDD)
According to the 2025 Focalpoint Coaching Franchise Disclosure Document, franchisees are required to indemnify the franchisor and related parties against a broad range of claims and damages. This includes obligations, actual damages, consequential damages, and other costs incurred in defending against any claim. These costs can include reasonable fees for accountants, arbitrators, attorneys, and expert witnesses, as well as costs for investigation, proof of facts, court costs, travel, living expenses, and other litigation-related expenses. This applies regardless of whether litigation, arbitration, or alternative dispute resolution is formally commenced.
The franchisee's indemnification obligation extends to damages arising directly or indirectly from the operation of the franchised business, employment matters related to the business, the franchisee's conduct under the agreement, or any breach of the agreement. This obligation exists even if the damages are alleged to have been caused by the negligence of the franchisor, unless the damages are determined to be solely caused by the franchisor's gross negligence or willful misconduct by a court or arbitrator.
Focalpoint Coaching franchisees must promptly notify the franchisor of any potential indemnification claims within three days of becoming aware of them. The franchisor has the right to choose legal counsel, control the response to any claim, and manage the defense, including settlements or other corrective actions. Franchisees are required to fully cooperate with the franchisor in defending any claim and must reimburse the franchisor for all costs and expenses, including court costs and reasonable attorney's fees, within ten days of receiving an invoice. This indemnification obligation remains in effect even after the franchise agreement expires or is terminated, and the franchisor is not required to seek recovery from insurers or mitigate losses before seeking indemnification from the franchisee.
This broad indemnification clause means that a Focalpoint Coaching franchisee could be responsible for significant financial liabilities due to various operational or contractual issues. Prospective franchisees should carefully consider this extensive obligation and consult with legal counsel to fully understand the potential risks and liabilities associated with it.