Under what conditions is the Gold Star franchisee's indemnification obligation excluded?

According to Gold Star's 2025 Franchise Disclosure Document, a franchisee's obligation to indemnify the company does not apply if a court determines that the liability of the indemnified party (Gold Star) resulted solely and directly from the gross negligence or willful misconduct of Gold Star itself.

In simpler terms, while the franchisee generally must protect Gold Star from claims and expenses related to the business, this protection does not extend to situations where Gold Star is directly and solely responsible for damages due to their own gross negligence or intentional misconduct. This means Gold Star cannot seek protection from the franchisee if their own actions are the primary cause of the issue.

This clause is designed to prevent Gold Star from shifting responsibility for its own serious errors or intentional wrongdoing onto the franchisee. However, the exclusion is limited to cases where a court specifically finds that Gold Star's gross negligence or willful misconduct was the sole and direct cause of the liability. The franchisee remains responsible for other liabilities related to the operation of the Gold Star restaurant.