What costs are included in the indemnification obligations of the Gold Star franchisee?

According to Gold Star's 2025 Franchise Disclosure Document, franchisees are obligated to indemnify the company against various claims, debts, liabilities, and obligations that arise from the operation of the Gold Star restaurant. This indemnification extends to protecting Gold Star, its officers, directors, employees, agents, affiliates, successors, and assigns. The franchisee must cover all costs associated with defending against or responding to these claims, including legal and accounting fees.

The specific costs that the Gold Star franchisee is responsible for include any claims, demands, losses, obligations, judgments, settlements, penalties, damages, liabilities, costs, or expenses. These can be of any kind, including court costs and reasonable attorneys' fees, as well as expenses related to investigation, defense, prosecution, or settlement. These costs can arise directly or indirectly from the construction, operation, or condition of the business or store, the conduct of business, ownership or possession of property, or any act or omission by the franchisee or their agents.

However, the franchisee's indemnification obligations do not extend to liabilities resulting solely and directly from the gross negligence or willful misconduct of Gold Star itself. This provision ensures that franchisees are not responsible for liabilities caused by Gold Star's own actions. This indemnification clause survives the termination or expiration of the Franchise Agreement, meaning that even after the agreement ends, the franchisee may still be responsible for these obligations. This is a standard practice in franchising, where the franchisor seeks to protect itself from liabilities arising from the franchisee's operation of the business.