In the event of an allegation that Hyper Kidz is the employer of the franchisee's employees, is the franchisee required to assist in defending against the allegation?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
You acknowledge and agree that any training we provide for your employees is geared to impart to those employees, with your ultimate authority, the various procedures, protocols, systems and operations of a Hyper Kidz Business and in no fashion reflects any employment relationship between us and such employees. If it is ever asserted that we are the employer, joint employer or co-employer of any of your employees in any private or government investigation, action, proceeding, arbitration or other setting, you irrevocably agree to assist us in defending said allegation, appearing at any venue requested by us to testify on our behalf; participating in depositions or other appearances; or preparing affidavits rejecting any assertion that we are the employer, joint employer or co-employer of any of your employees.
Source: Item 23 — RECEIPTS (FDD pages 52–205)
What This Means (2024 FDD)
According to Hyper Kidz's 2024 Franchise Disclosure Document, if there is ever an allegation that Hyper Kidz is the employer, joint employer, or co-employer of any of the franchisee's employees in any private or government investigation, action, proceeding, arbitration, or other setting, the franchisee irrevocably agrees to assist Hyper Kidz in defending against the allegation. This assistance includes appearing at any venue requested by Hyper Kidz to testify on their behalf, participating in depositions or other appearances, and preparing affidavits rejecting any assertion that Hyper Kidz is the employer, joint employer, or co-employer of the franchisee's employees.
This requirement means that franchisees could face legal obligations and expenses if such a claim arises. Franchisees must be prepared to allocate time and resources to support Hyper Kidz's defense, potentially including legal consultation to understand their obligations and prepare their testimony or affidavits. This could also mean the franchisee has to take time away from operating the business to fulfill these obligations.
This clause is designed to protect Hyper Kidz from potential liabilities related to the franchisee's employees. By requiring franchisees to assist in defending against such claims, Hyper Kidz aims to reinforce the independent contractor status of its franchisees and maintain a clear separation between the franchisor and franchisee's employees. Prospective franchisees should carefully consider this obligation and its potential implications for their business operations and legal responsibilities.