Does the Gold Star franchisee's indemnification obligation extend to the company's officers and directors?
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, the franchisee's indemnification obligations do extend to the company's officers and directors. Specifically, the franchisee must indemnify and hold harmless Gold Star, its officers, directors, employees, agents, affiliates, successors, and assigns. This means the franchisee is responsible for protecting these parties from any claims, demands, losses, obligations, judgments, settlements, penalties, damages, liabilities, costs, or expenses.
This indemnification covers a wide range of issues related to the franchisee's business. These include the construction, operation, or condition of the store, the conduct of business at the store, the ownership or possession of real or personal property, and any act or omission by the franchisee or their agents, employees, contractors, invitees, or representatives. The franchisee is responsible for covering costs such as court costs and reasonable attorney's fees.
However, there is an exception to this indemnification. Gold Star will be responsible for any liability if a court determines that it resulted solely and directly from the gross negligence or willful misconduct of the indemnified party. This indemnification provision survives the termination or expiration of the Franchise Agreement, meaning the franchisee's obligation to indemnify Gold Star continues even after the agreement ends.