What is the role of Hawaiian Bros Island Grill in relation to the Gift Cards?
Hawaiian_Bros_Island_Grill Franchise · 2025 FDDAnswer from 2025 FDD Document
recovering more or less than GIFTCO's actual Losses with respect to any particular period. "Losses" includes losses, costs, expenses, and rebates, discounts and similar incentives extended to third parties, whether anticipated, estimated or actual.
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- Confidentiality. PARTICIPANT acknowledges that it may be provided access to confidential information of third party vendors that provide services with respect to the Gift Card Program, and that GIFTCO may be bound by confidentiality obligations with respect to such confidential information under its agreements with such vendors (the "Confidentiality Obligations"). Accordingly, PARTICIPANT agrees that it will be bound by and comply with the provisions of any Confidentiality Obligations to the same extent as if PARTICIPANT were a party to such agreements.
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- Issuer. The parties recognize and agree that GIFTCO is the issuer and obligated for the value of all Gift Cards and that PARTICIPANT is merely acting as agent of GIFTCO for selling and redeeming Gift Cards.
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- Indemnity. PARTICIPANT agrees to indemnify, defend and hold harmless GIFTCO from and against any and all damages, losses, liabilities, claims, or causes of action (including attorneys' fees incurred in the enforcement of this indemnification) (collectively, "Losses") arising out of or related to the offer, sale, redemption or any use of Gift Cards at
Restaurants operated by PARTICIPANT or otherwise in connection with PARTICIPANT'S participation in the Gift Card Program, except to the extent such Losses result from the willful misconduct or gross negligence of GIFTCO.
Source: Item 23 — RECEIPTS (FDD pages 77–262)
What This Means (2025 FDD)
According to the 2025 Hawaiian Bros Island Grill FDD, Hawaiian Bros Island Grill restaurants participate in a gift card program managed by GIFTCO, where customers can purchase and redeem gift cards. While GIFTCO is the issuer and is obligated for the value of all gift cards, Hawaiian Bros Island Grill franchisees act as GIFTCO's agent for selling and redeeming the gift cards.
As an agent, the franchisee, referred to as PARTICIPANT in the agreement, agrees to indemnify and defend GIFTCO against any damages, losses, or liabilities arising from the sale, redemption, or use of gift cards at their restaurants. This indemnification excludes losses resulting from GIFTCO's willful misconduct or gross negligence and survives the termination of the agreement. This means that the franchisee bears the responsibility for issues related to gift card transactions, except in cases where GIFTCO is directly at fault.
The agreement regarding the gift card program remains in effect as long as the franchisee operates a Hawaiian Bros Island Grill restaurant under a valid franchise agreement. GIFTCO can terminate the agreement with 30 days' written notice to the franchisee. The agreement also stipulates that neither party is an agent, legal representative, partner, or employee of the other, except as expressly stated in the agreement, and neither party has the right to bind or obligate the other. This clarifies that the franchisee's role in the gift card program is specifically defined and does not create a broader agency relationship.
For a prospective franchisee, this arrangement means they must handle gift card transactions carefully and ensure compliance with the program's terms to avoid potential liabilities. They should also understand the conditions under which GIFTCO can terminate the gift card agreement and the importance of maintaining a valid franchise agreement to remain part of the gift card program. Additionally, franchisees should be aware that revenue from the initial sale of gift cards is not included in gross sales, but revenue from products and services purchased with gift cards is included.