What is the scope of the Gold Star franchisee's indemnification obligations regarding the operation of the store?
Gold_Star Franchise · 2025 FDDAnswer from 2025 FDD Document
FRANCHISEE will indemnify, defend and hold the COMPANY harmless from and against any and all claims, debts, liabilities or obligations arising directly or indirectly from, as a result of or in connection with the operation of the Store (excluding, however, liabilities caused by (i) of all FRANCHISEE's other obligations hereunder, and undertake to be bound by Sections 1 FRANCHISEE's proper reliance on or use of procedures or materials provided by the COMPANY, or (ii) the COMPANY's gross negligence), and will pay all costs (including, without limitation, legal and accounting fees) incurred by the COMPANY in defending against and/or responding to them. FRANCHISEE WILL DISPLAY PROMINENTLY AT ITS PLACE OF BUSINESS, ON ALL CORRESPONDENCE WITH THIRD PARTIES, AND IN ANY PRINTED MATERIALS BEARING ITS NAME OR BUSINESS LOCATION, A STATEMENT THAT THE STORE IS INDEPENDENTLY OWNED AND OPERATED BY FRANCHISEE.
Source: Item 23 — Receipts (FDD pages 53–163)
What This Means (2025 FDD)
According to Gold Star's 2025 Franchise Disclosure Document, franchisees have extensive indemnification obligations to protect the company. Specifically, the franchisee must indemnify, defend, and hold Gold Star harmless from any claims, debts, liabilities, or obligations that arise directly or indirectly from the operation of the store. This includes covering all costs, such as legal and accounting fees, that Gold Star incurs while defending against or responding to these claims.
However, there are some exceptions to this indemnification requirement. Franchisees are not responsible for liabilities caused by their proper reliance on or use of procedures or materials provided by Gold Star. Additionally, franchisees are not responsible for liabilities caused by Gold Star's gross negligence.
To ensure transparency and avoid confusion, Gold Star requires franchisees to prominently display a statement at their place of business, on all correspondence with third parties, and in any printed materials. This statement must clearly indicate that the store is independently owned and operated by the franchisee. This helps to reinforce the independent nature of the franchise relationship and minimize any potential liability for Gold Star arising from the franchisee's actions.