Are Equity Owners jointly and severally liable with the Focus Cfo franchisee for indemnification obligations?
Focus_Cfo Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee and Equity Owner shall hold harmless, defend and indemnify Focus CFO, any affiliate of Focus CFO, all employees, officers, directors, managers, members, franchisees, licensees, successors and assigns of Focus CFO and Focus CFO affiliates (collectively "Focus CFO Indemnitees") from and against all losses, damages, fines, costs, expenses or liabilities (including reasonable attorneys' fees, costs of investigation, expert fees and disbursements and all other costs of investigation, arbitration and/or litigation, court costs, settlement amounts, judgments, and compensation for damages to Focus CFO's reputation and goodwill) incurred in connection with any action, suit, demand, claim, investigation or proceeding, or any settlement thereof, which arises from or is based upon Franchisee's: (i) violation, breach or asserted violation of any federal, state or local law, regulation or rule; (ii) the commission of an act or omission involving a felony or involving fraud, embezzlement or other criminal conduct; (iii) material breach of any representation, warranty, covenant or provision of this Agreement or any other agreement between Franchisee and Focus CFO; (iv) gross negligence or intentional acts, especially related to work performed for a Focus CFO client, (v) infringement or alleged infringement, of a third party's patent, copyright, trademark, tradename, trade secrets or other intellectual property or the misuse or disclosure of third party confidential information or (vi) any behavior causing physical harm to an individual or property or behavior which is coercive, threatening, abusive, exploitive, harassing (including sexual, verbal or physical harassment) or which is otherwise inappropriate in a workplace or professional environment.
The obligations of Franchisee and Equity Owner in this Section shall expressly survive the expiration or early termination of this Agreement.
Furthermore, Franchisee and Equity Owner agree that their obligations and liabilities under this Section are joint and several.
- 10.6.
Notice.
Franchisee shall give Focus CFO immediate notice (within 24 hours) of any such action, suit, demand, claim, investigation or proceeding that may give rise to a claim for indemnification.
Source: Item 23 — Receipts (FDD pages 37–126)
What This Means (2025 FDD)
According to the 2025 Focus Cfo Franchise Disclosure Document, the Equity Owner is jointly and severally liable with the franchisee for indemnification obligations. This means that Focus Cfo can seek full recovery of losses from either the franchisee or the Equity Owner, or both, for any indemnification claims.
The FDD states that both the Franchisee and the Equity Owner must hold harmless, defend, and indemnify Focus CFO and its affiliates against all losses, damages, fines, costs, expenses, or liabilities. These include attorney's fees, investigation costs, and compensation for damages to Focus CFO's reputation and goodwill. This indemnification covers various situations, such as violations of laws, criminal acts, breaches of the franchise agreement, gross negligence, intellectual property infringement, and any behavior causing harm or being inappropriate.
The obligations of both the Franchisee and Equity Owner survive the expiration or early termination of the Franchise Agreement. Furthermore, the Franchisee must provide Focus Cfo with immediate notice (within 24 hours) of any action that may lead to an indemnification claim. This joint and several liability has significant implications for the Equity Owner, as they are personally responsible for the actions and potential liabilities of the franchise business.