Does my obligation to indemnify Gokhale Method survive the termination or expiration of the franchise agreement?
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 Gokhale Method's 2024 Franchise Disclosure Document, the franchisee's obligation to indemnify Gokhale Method does indeed survive the termination or expiration of the franchise agreement. This means that even after the franchise agreement ends, the franchisee remains responsible for covering any claims, losses, costs, expenses, liabilities, and damages that arise from their operation of the franchised business or any breach of the agreement.
This indemnification extends to Gokhale Method, its successors, assigns, affiliates, and their respective officers, directors, shareholders, agents, representatives, independent contractors, servants, and employees. The franchisee is responsible for defending against any claims, including covering reasonable attorneys' fees, unless the claims, obligations, and damages are determined to be caused solely by Gokhale Method's gross negligence or willful misconduct, as ruled by a court of competent jurisdiction.
Furthermore, if Gokhale Method incurs any costs or expenses related to a proceeding involving the franchisee in which Gokhale Method is not a party, the franchisee must reimburse Gokhale Method for all such costs and expenses upon presentation of invoices. This includes legal fees, travel expenses, and other charges. Gokhale Method also retains the right to choose its own legal counsel in any lawsuit or dispute resolution.
This survival clause is a standard practice in franchising, designed to protect the franchisor from liabilities stemming from the franchisee's actions during the term of the agreement, even after it has ended. Prospective franchisees should carefully consider the scope of this indemnification obligation and understand that it continues even after the franchise relationship concludes.