Does the indemnification obligation of the Licensed Provider to HealthSource Chiropractic extend to damages arising from professional malpractice?
Healthsource_Chiropractic Franchise · 2025 FDDAnswer from 2025 FDD Document
- 11.1 Licensed Provider agrees to defend, indemnify and hold harmless Management Company, HealthSource and their respective owners, directors, officers, employees, agents, successors, and assigns (each a "Management Indemnified Party"), from and against any and all claims, lawsuits, demands, actions, causes of action or other events, and for all costs and expenses incurred by the Management Indemnified Party in connection therewith, including without limitation actual and consequential damages, reasonable attorneys', accountants', and/or expert witness fees, cost of investigation and proof of facts court costs, other litigation expenses, and travel and living expenses, to the extent caused by, relating to or otherwise arising out of (1) the effects, outcomes and consequences of Licensed Provider's acts and omissions and the acts and omissions of Licensed Provider's employees, representatives and agents in connection with or relating to the provision of the Licensed Provider Services or the operation of the Clinic, (2) any agreements, representations, or warranties Licensed Provider makes to third parties that are not expressly authorized under this Agreement, (3) any damages to any person or property directly or indirectly arising out of the performance of the Licensed Provider Services or the operation of the Clinic, whether or not caused by Licensed Provider's negligent or willful action or failure to act or acts or omissions deemed to be professional malpractice, and/or (4) Licensed Provider's breach of any provision of this Agreement. HealthSource shall be deemed to be a third party beneficiary of all of the covenants contained in this Section 11.1.
- 11.2 The indemnification obligations described in this Section 11 will continue in full force and effect after, and notwithstanding, the expiration, renewal or termination of this Agreement.
Source: Item 23 — Receipts (FDD pages 77–282)
What This Means (2025 FDD)
According to HealthSource Chiropractic's 2025 Franchise Disclosure Document, the indemnification obligation of the Licensed Provider to HealthSource extends to damages arising from professional malpractice. Specifically, the Licensed Provider must defend, indemnify, and hold harmless HealthSource and its affiliates from claims, lawsuits, and expenses, including damages, attorney's fees, and litigation costs. This obligation arises from the Licensed Provider's acts or omissions, agreements made to third parties without authorization, damages to persons or property, and breaches of the Franchise Agreement.
This indemnification extends to damages arising from the performance of Licensed Provider Services or the operation of the Clinic, even if caused by negligence, willful action, or failure to act, including acts or omissions deemed professional malpractice. HealthSource Chiropractic is considered a third-party beneficiary of these indemnification covenants.
This means that as a HealthSource Chiropractic franchisee, you could be held responsible for covering HealthSource's legal costs and damages if a claim arises due to your actions, the actions of your employees, or from professional malpractice in the operation of your clinic. This obligation remains in effect even after the termination or expiration of the Franchise Agreement.