Is the Licensed Provider responsible for indemnifying HealthSource Chiropractic for damages caused by the Licensed Provider's employees?
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 Licensed Provider is responsible for indemnifying HealthSource and related parties from damages caused by the Licensed Provider's employees. Specifically, the Licensed Provider must defend, indemnify, and hold harmless HealthSource Chiropractic and its owners, directors, officers, employees, agents, successors, and assigns from any claims, lawsuits, demands, actions, or causes of action.
This indemnification extends to all costs and expenses incurred by HealthSource Chiropractic, including actual and consequential damages, reasonable attorneys', accountants', and expert witness fees, investigation costs, court costs, litigation expenses, and travel and living expenses. This obligation arises from the effects, outcomes, and consequences of the Licensed Provider's acts and omissions, as well as those of their employees, representatives, and agents, in connection with providing Licensed Provider Services or operating the clinic.
This means that if a HealthSource Chiropractic franchisee's employee makes an error or omission that leads to a claim or lawsuit, the franchisee is responsible for covering all associated costs and damages incurred by HealthSource Chiropractic. This indemnification obligation remains in effect even after the termination or expiration of the Franchise Agreement.
This type of indemnification clause is common in franchise agreements, as it protects the franchisor from liabilities arising from the franchisee's operations. Prospective HealthSource Chiropractic franchisees should carefully review this section of the Franchise Agreement and understand the full scope of their indemnification obligations, consulting with legal and insurance professionals to assess potential risks and ensure adequate coverage.