What costs and expenses must an Itan franchisee reimburse to the Indemnified Parties for defending a claim?
Itan Franchise · 2025 FDDAnswer from 2025 FDD Document
You and your Owners must immediately notify us of any Claim or proceeding described above. The Indemnified Parties have the right, in their sole discretion, to: (a) retain counsel of their choosing to represent them; and (b) control the response thereto and the defense thereof, including the right to settle the Claim. You may participate in the defense at your expense. You must fully cooperate and assist the Indemnified Parties with defense of the Claim and reimburse all costs and expenses they incur in defending the Claim including, without limitation, mediation, arbitration or court expenses, expert fees and Travel Expenses incurred by attorneys or expert witnesses to attend proceedings or hearings relating to the matter. Your indemnification obligations survive, and continue in full force and effect after, the Transfer, termination or expiration of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 44–190)
What This Means (2025 FDD)
According to Itan's 2025 Franchise Disclosure Document, as a franchisee, you must reimburse the Indemnified Parties for all costs and expenses they incur while defending a claim. These expenses include mediation, arbitration, or court expenses, expert fees, and Travel Expenses incurred by attorneys or expert witnesses to attend proceedings or hearings related to the matter. This obligation extends to both you and your Owners.
The Indemnified Parties have the right to choose their legal counsel and control the response and defense of any claim. While you can participate in the defense, it will be at your own expense. It is critical that you immediately inform Itan of any claim or proceeding.
This indemnification obligation remains in effect even after the franchise agreement is transferred, terminated, or expires. This means that even after you are no longer operating the Itan franchise, you could still be responsible for these costs if a claim arises that relates to your period of ownership. This could create a significant financial burden, so it is important to understand the types of claims that could trigger this indemnification and to maintain appropriate insurance coverage.