To what extent is a Jersey Mikes franchisee required to indemnify the franchisor, considering modifications related to the indemnified party's negligence, willful misconduct, strict liability, or fraud?

According to Jersey Mikes's 2025 Franchise Disclosure Document, specifically Item 23, a modification exists regarding the franchisee's obligation to indemnify the franchisor. This modification states that a Jersey Mikes franchisee is not required to indemnify, reimburse, defend, or hold harmless the franchisor or any other indemnified party if the losses or liabilities are a direct result of the indemnified party's negligence, willful misconduct, strict liability, or fraud. This modification applies to any relevant provision within the franchise agreement or related agreements.

In practical terms, this means that if Jersey Mikes, as the franchisor, is directly responsible for damages or losses due to their own actions or failures (such as negligence or fraud), the franchisee is protected from having to cover those costs. This is a significant protection for franchisees, as it prevents them from being held financially responsible for the franchisor's misconduct. It shifts the responsibility for such actions back to the party at fault, which is a fairer distribution of risk.

This type of modification is not uncommon in franchise agreements, as many states have laws in place to protect franchisees from unfair or overreaching terms. Franchisees should carefully review the indemnification clauses in their franchise agreements and understand their rights and obligations under the law. This modification ensures that Jersey Mikes franchisees are not unfairly burdened with liabilities that arise from the franchisor's own actions, providing a more balanced and equitable relationship between the parties.