What is included in the definition of 'claims' for the purpose of Hydrodog franchisee indemnification?
Hydrodog Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — RECEIPTS (FDD pages 43–166)
What This Means (2025 FDD)
According to Hydrodog's 2025 Franchise Disclosure Document, the term 'claims,' for indemnification purposes, is broadly defined. It encompasses all obligations, damages, and costs reasonably incurred when defending against any claim against the Indemnified Parties. This definition extends to various types of damages, including actual and consequential damages.
Specifically, the definition of 'claims' includes reasonable accountants', arbitrators', attorneys', paralegals', and expert witness fees. It also covers costs related to the investigation and proof of facts, court costs, other expenses related to litigation, arbitration, or alternative dispute resolution, as well as travel and living expenses. This means that if Hydrodog or its related parties face any claim arising from the franchisee's business operation or breach of the franchise agreement, the franchisee may be responsible for covering all these enumerated costs.
This broad definition of 'claims' in the indemnification clause means a Hydrodog franchisee could face significant financial exposure if a claim arises from their business operations, even if Hydrodog's negligence is alleged but not proven. The franchisee is responsible for a wide array of potential costs, including legal and investigative expenses, which can quickly accumulate. This highlights the importance of understanding the scope of the indemnification clause and securing adequate insurance coverage to mitigate potential risks.