Does the Hydrodog franchisee's indemnification obligation apply even if Hydrodog's negligence is alleged?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
- 18.4 Indemnification. You agree to indemnify, defend and hold harmless us, our affiliates, our parents, and our and our affiliates' and parents' respective shareholders, directors, officers, employees, agents, successors and assignees (the "Indemnified Party(ies)") against and to reimburse any one or more of the Indemnified Parties for all claims, obligations and damages described in this Section, any and all taxes described in this Agreement and any and all claims and liabilities directly or indirectly arising out of your HydroDog Business's operation (even if our negligence is alleged, but not proven) or your breach of this Agreement. For purposes of this indemnification, "claims" includes all obligations, damages (actual, consequential or otherwise) and costs reasonably incurred in the defense of any claim against any of the Indemnified Parties, including, without limitation, reasonable accountants', arbitrators', attorneys', paralegals' and expert witness fees, costs of investigation and proof of facts, court costs, other expenses of litigation, arbitration or alternative dispute resolution and travel and living expenses. We have the right to defend any such claim against us. This indemnity will continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement. Under no circumstances will we or any other Indemnified Party be required to seek recovery from any insurer or other third party, or otherwise to mitigate our, their or your losses and expenses, in order to maintain and recover fully a claim against you. You agree that a failure to pursue such recovery or mitigate a loss will in no way reduce or alter the amounts we or another Indemnified Party may recover from you.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, the franchisee's indemnification obligations extend to claims arising from the Hydrodog business's operation, even if Hydrodog's negligence is alleged, but not proven. This means that a Hydrodog franchisee could be responsible for covering Hydrodog's legal expenses and damages if a claim arises from the franchisee's business operations, regardless of whether Hydrodog is also alleged to be negligent. However, the franchisee is not responsible if Hydrodog's negligence is proven.
The indemnification clause requires the franchisee to defend and hold harmless Hydrodog and its affiliates, parents, shareholders, directors, officers, employees, agents, successors, and assignees. This includes covering all claims, obligations, and damages, as well as costs incurred in defending against any claim, such as accountant, arbitrator, attorney, and expert witness fees.
This provision places a significant financial burden on the Hydrodog franchisee, as they may be required to cover potentially substantial costs even in situations where Hydrodog is alleged to be at fault. The franchisee is responsible for these costs unless Hydrodog's negligence is proven. It is important for prospective franchisees to fully understand the scope of this indemnification clause and to consider obtaining adequate insurance coverage to protect themselves against potential claims. Franchisees should also seek legal counsel to fully understand their obligations under this agreement.