Are there any exceptions to the indemnification obligations of a Hydrodog franchisee?
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, a franchisee is generally required to indemnify Hydrodog and its related parties. This means the franchisee must protect Hydrodog from claims, obligations, and damages arising from the franchisee's business operations or any breach of the franchise agreement. This indemnification extends to taxes, and it remains in effect even after the agreement expires or terminates.
However, the FDD specifies one exception to this broad indemnification obligation. The franchisee is not required to indemnify Hydrodog for claims arising from Hydrodog's own proven negligence. So, while the franchisee is responsible for defending Hydrodog even if negligence is alleged, they are not responsible if that negligence is proven in court.
This indemnification clause is fairly standard in franchising. It is designed to protect the franchisor from liabilities caused by the franchisee's actions. However, the exception for Hydrodog's proven negligence provides a limited degree of protection for the franchisee. A prospective franchisee should carefully consider the scope of this indemnification and consult with an attorney to fully understand its implications.