Does the Gold Star franchise agreement require the franchisee to indemnify the company for claims related to the condition of the store?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
- 19.3 Indemnification. FRANCHISEE shall indemnify and hold harmless (and at the option of the COMPANY defend) the COMPANY, its officers, directors, employees, agents, affiliates, successors and assigns, from and against any and all claims, demands, losses, obligations, judgments, settlements, penalties, damages, liabilities, costs or expenses (including but not limited to court costs and reasonable attorneys' fees) of any kind whatsoever (including expenses of investigation, defense, prosecution or settlement) directly or indirectly based upon, arising out of, or in any way related to (a) the construction, operation or condition of any part of the Business or the Store, (b) the conduct of business thereat (whether or not such business is conducted in compliance with the provisions of this Agreement), (c) the ownership or possession of real or personal property by FRANCHISEE or (d) any act or omission of any kind of FRANCHISEE or any of its agents, employees, contractors, invitees or representatives. FRANCHISEE's indemnity obligations shall exclude only any liability of an indemnified party which is determined by a court of competent jurisdiction to have resulted solely and directly from the gross negligence or willful misconduct of such indemnified party. This provision will survive any termination or expiration of this Agreement.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, franchisees are required to indemnify Gold Star and its related parties. Specifically, the franchisee must indemnify Gold Star from claims, demands, losses, judgments, settlements, penalties, damages, liabilities, costs, or expenses, including legal fees, that arise directly or indirectly from the construction, operation, or condition of the Gold Star store, or the conduct of business at the store. This obligation extends to any act or omission by the franchisee, its agents, employees or representatives.
This means that if a customer or employee is injured at the Gold Star location due to the condition of the premises, or if any other claim arises related to the store's operation, the franchisee is responsible for covering Gold Star's costs in defending against or settling the claim. This includes not only direct damages but also legal expenses.
The franchisee's indemnification obligations exclude liability of Gold Star that a court determines resulted solely and directly from the gross negligence or willful misconduct of Gold Star itself. This indemnification provision survives the termination or expiration of the franchise agreement, meaning the franchisee's responsibility for these types of claims continues even after the franchise relationship ends.