Does the indemnification agreement in the Hyper Kidz General Release require payment to the claimant as a condition precedent to recovery?
Hyper_Kidz Franchise · 2024 FDDAnswer from 2024 FDD Document
In the event that any claim, demand, or suit shall be made or institute against any Released Franchisor Party because of any such purported assignment, transfer or subrogation, Franchisee and Franchisee's Principal(s) agree to indemnify and hold such Released Franchisor Party free and harmless from and against any such claim, demand, or suit, including reasonable costs and attorneys' fees incurred in connection therewith.
It is further agreed that this indemnification and hold harmless agreement shall not require payment to such claimant as a condition precedent to recovery under this paragraph.
Source: Item 22 — CONTRACTS (FDD page 52)
What This Means (2024 FDD)
According to the 2024 Hyper Kidz Franchise Disclosure Document, the indemnification agreement within the General Release does not require payment to the claimant as a condition that must be met before recovery can occur. This means that Hyper Kidz franchisees and their principals are obligated to indemnify and hold harmless the released franchisor parties from any claims, demands, or suits without needing to first make a payment to the claimant.
This aspect of the agreement protects the franchisor by ensuring that franchisees bear the responsibility for defending against claims related to purported assignments, transfers, or subrogation, regardless of whether an initial payment has been made to the claimant. The franchisee is responsible for covering costs and attorney's fees associated with such claims.
For a prospective Hyper Kidz franchisee, this clause means they could be responsible for covering legal costs and potential judgments arising from claims related to the released franchisor parties, even if no payment has been made to the claimant. It is important for franchisees to understand the scope of this indemnification and ensure they have adequate insurance and legal resources to address potential claims.