What specific statute requires Focus Cfo to reimburse defense costs in Minnesota?
Focus_Cfo Franchise · 2025 FDDAnswer from 2025 FDD Document
- 10.3.
Indemnification.
Focus CFO will indemnify Franchisee for judgments, settlements, penalties, fines or expenses incurred in a proceeding to which Franchisee is a party because Franchisee is or was serving as an Area President of Focus CFO, unless the underlying claim is a result or related to an Adverse Event as defined below.
Any indemnification required or authorized under this Section will be recoverable only out of the assets of Focus CFO.
No Focus CFO affiliate will have any liability with respect thereto.
No member, director, manager, officer, franchisee or licensee of Focus CFO or any Focus CFO affiliate will have any personal liability with respect thereto.
- 10.4.
Adverse Event Defined.
For purposes of this Agreement, an Adverse Event is deemed to have occurred if Focus CFO determines, in its sole discretion after its review of the surrounding facts and circumstances, that one or more of the following circumstances or events applies or has occurred with respect to Franchisee: (i) Franchisee committed an act or omission constituting a felony or involving fraud, embezzlement or other
Source: Item 23 — Receipts (FDD pages 37–126)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, the excerpts provided do not specify a particular Minnesota statute that requires Focus Cfo to reimburse defense costs. However, the FDD does outline circumstances under which Focus Cfo will indemnify a franchisee. According to section 10.3, Focus Cfo will indemnify a franchisee for expenses incurred in legal proceedings if the franchisee is serving as an Area President of Focus Cfo, unless the claim results from an Adverse Event. An Adverse Event includes acts such as felonies, fraud, or embezzlement committed by the franchisee.
Section 10.3 also states that any indemnification will be recoverable only from Focus Cfo's assets, and no affiliate, member, director, manager, officer, franchisee, or licensee of Focus Cfo will have personal liability. This means that if a franchisee is sued and meets the criteria for indemnification, Focus Cfo, not its individual representatives, is responsible for covering those costs, provided the claim doesn't stem from an Adverse Event.
Prospective franchisees in Minnesota should seek clarification from Focus Cfo regarding specific state laws related to indemnification and defense cost reimbursement. It would be prudent to consult with a legal professional to understand their rights and obligations under Minnesota law in relation to the franchise agreement.