What is the Kidokinetics franchisee required to do regarding claims, demands, taxes, costs or judgments against the franchisor?
Kidokinetics Franchise · 2024 FDDAnswer from 2024 FDD Document
such action and the cost.
- 14.4. Indemnification. Franchisee and Franchisee's principals agree to indemnify, defend and hold Franchisor, its affiliates, and its respective members, directors, officers, employees, agents, partners, shareholders, agents, contractors, successors, assignees, personal representatives, heirs and legatees of all these persons or entities ("Indemnitees") harmless to the fullest extent permitted by law, from and against and to reimburse them for all claims, obligations, liabilities and damages ("Claims"), including any and all taxes, directly or indirectly arising out of, in whole or in part: (a) the operation of Franchisee's Kidokinetics Business, and Franchisee's advertising; (b) the use of the Marks and other Confidential Information; (c) the transfer of any interest in this Agreement or Franchisee's Kidokinetics Business in any manner not in accordance with this Agreement; (d) the infringement, alleged infringement, or any other violation or alleged violation by Franchisee or any of Franchisee's principals of any patent, mark or copyright or other proprietary right owned or controlled by third parties; or (e) libel, slander or any other form of defamation of Franchisor, the System, or System franchisees by Franchisee or any of Franchisee's principals. For purposes of this indemnification, "Claims" will mean and include all obligations, actual, consequential, punitive and other damages, and costs reasonably incurred in the defense of any action, including attorneys', attorney assistants' and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses, and travel and living expenses, whether or not such claims exceed the amount of insurance coverage available to Franchisor through Franchisee. Franchisor has the right to defend any such claim against Franchisor in the manner Franchisor deems appropriate or desirable in Franchisor's discretion. Such an undertaking by Franchisor will, in no manner or form, diminish Franchisee's and each of Franchisee's principals' obligations to indemnify the Indemnitees and to hold them harmless. This indemnity will continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.
Franchisee agrees to give Franchisor notice of any action, suit, proceeding, claim, demand, inquiry, or investigation described above. The Indemnitees shall have the right, in their sole discretion, to: (i) retain counsel of their own choosing to represent them with respect to any Claim; and (ii) control the response thereto and the defense thereof, including the right to enter into an agreement to settle such Claim. Franchisee may participate in such defense at its own expense.
Source: Item 22 — CONTRACTS (FDD page 59)
What This Means (2024 FDD)
According to Kidokinetics' 2024 Franchise Disclosure Document, franchisees have specific obligations regarding claims, demands, taxes, costs, or judgments against the franchisor. Kidokinetics franchisees must indemnify, defend, and hold harmless the franchisor (including its affiliates, members, directors, officers, employees, agents, partners, shareholders, agents, contractors, successors, assignees, personal representatives, heirs, and legatees) from all claims, obligations, liabilities, and damages, including taxes, arising directly or indirectly from the franchisee's Kidokinetics business operations and advertising. This indemnification extends to the use of the Kidokinetics marks and confidential information, the transfer of any interest in the Franchise Agreement, infringement of proprietary rights, and defamation of the franchisor or the Kidokinetics system.
This indemnification covers all obligations, actual, consequential, punitive, and other damages, as well as costs reasonably incurred in the defense of any action, including attorneys', attorney assistants' and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses, and travel and living expenses. The franchisor retains the right to defend any claim against it in the manner it deems appropriate. The franchisee's obligation to indemnify the franchisor is not diminished by any action taken by the franchisor to defend such claims.
Furthermore, the Kidokinetics franchisee is responsible for paying all taxes and other fees owed to any federal, state, and local government when due. Additionally, the franchisee must notify the franchisor in writing within three calendar days of the commencement of any action, suit, or proceeding, and of the issuance of any order, writ, injunction, award, or decree of any court, agency, or other governmental instrumentality, in any way relating to or affecting the operation or financial condition of the Kidokinetics Business. This means that franchisees must be proactive in managing their legal and financial responsibilities and promptly inform the franchisor of any potential issues that could impact the Kidokinetics business or the franchisor's interests.