Is a Focus Cfo franchisee required to indemnify Focus Cfo for violations of federal, state, or local laws?
Focus_Cfo Franchise · 2025 FDDAnswer from 2025 FDD Document
sexual, verbal or physical harassment) or which is otherwise inappropriate in a workplace or professional environment.
- 10.5. Franchisee Indemnification. 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, Focus Cfo franchisees and their equity owners must indemnify Focus CFO and its affiliates. This means the franchisee is responsible for protecting Focus CFO from losses, damages, fines, costs, expenses, or liabilities, including attorney's fees and settlement amounts, arising from certain actions.
Specifically, the franchisee must indemnify Focus CFO if the losses stem from the franchisee's violation of any federal, state, or local law, regulation, or rule. This obligation extends to instances of felony, fraud, embezzlement, or other criminal conduct committed by the franchisee. It also applies to breaches of the franchise agreement, gross negligence, intentional acts, infringement of intellectual property, misuse of confidential information, or any behavior causing physical or emotional harm.
The franchisee's duty to indemnify Focus CFO survives the termination or expiration of the franchise agreement. Furthermore, if there is more than one equity owner, their obligations are joint and several, meaning each owner is fully liable. The franchisee must also provide Focus CFO with immediate notice (within 24 hours) of any action that may lead to a claim for indemnification.
This type of indemnification clause is common in franchise agreements. It protects the franchisor from liabilities caused by the franchisee's actions. Prospective Focus Cfo franchisees should carefully consider the scope of this indemnification and ensure they have adequate insurance coverage to mitigate potential risks.