Does the indemnification obligation in the Gokhale Method franchise agreement extend to the franchisor's affiliates?
Gokhale_Method Franchise · 2024 FDDAnswer from 2024 FDD Document
- 19.3. Indemnification. You shall indemnify and hold us, our successor, assigns, Affiliates and their respective officers, directors, shareholders, agents, representatives, independent contractors, servants, and employees harmless against any and all claims, losses, costs, expenses, liabilities and damages arising directly or indirectly from, as a result of, or in connection with your operation of the Franchised Business or your breach of this Agreement, including, but not limited to, those alleged to be caused by our negligence, unless (and then only to the extent that) the claims, obligations, and damages are determined to be caused solely by our gross negligence or willful misconduct according to a final, unappealable ruling issued by a court of competent jurisdiction, as well as the costs, including reasonable attorneys' fees, of defending against them.
In the event we incur any costs or expenses, including, without limitation, legal fees, travel expenses, and other charges, in connection with any proceeding involving you in which we are not a party, you shall reimburse us for all such costs and expenses promptly upon presentation of invoices.
You acknowledge and agree that your indemnification and hold harmless obligations under this Section shall survive the termination or expiration of this Agreement.
Nothing herein shall preclude us from choosing our own legal counsel to represent us in any lawsuit, or other dispute resolution.
Source: Item 22 — CONTRACTS (FDD page 34)
What This Means (2024 FDD)
According to the 2024 Gokhale Method Franchise Disclosure Document, the franchisee's indemnification obligations do extend to the franchisor's affiliates. Specifically, the franchise agreement stipulates that the franchisee must indemnify and hold harmless Gokhale Method Institute, Inc., along with its successors, assigns, affiliates, and their respective officers, directors, shareholders, agents, representatives, independent contractors, servants, and employees.
This means that a Gokhale Method franchisee is responsible for covering claims, losses, costs, expenses, liabilities, and damages that arise directly or indirectly from their operation of the franchised business or any breach of the Franchise Agreement. This includes potential legal costs, such as attorney's fees, associated with defending against such claims.
However, there is an exception: the franchisee is not responsible for indemnifying the aforementioned parties if the claims, obligations, and damages are determined to be caused solely by the gross negligence or willful misconduct of Gokhale Method Institute, Inc. This determination must be made by a final, unappealable ruling from a court with the appropriate jurisdiction. This indemnification clause survives the termination or expiration of the Franchise Agreement, meaning the franchisee's responsibility extends even after the agreement is no longer in effect.