Under what circumstances will the Learningrx franchisee's indemnification not apply?
Learningrx Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee agrees to indemnify, defend and hold harmless Franchisor, its parent corporation, its subsidiaries and affiliates, Oikonomos Enterprises, LLC, and their respective shareholders, directors, officers, employees, agents, successors and assignees against all claims and liabilities directly or indirectly arising out of the operation of the Business or arising out of the use of the Marks and System in any manner not in accordance with this Agreement or Franchisee's violation of any federal, state, or local law, statute, rule or regulation, including but not limited to, violation of Privacy Laws provided, however, that the foregoing indemnity will not apply to claims to the extent they result from the willful misconduct or gross negligence of any indemnified person.
For purposes of this indemnification, claims shall mean and include all obligations, actual and consequential damages and costs reasonably incurred in the defense of any claim, including, without limitation, reasonable accountants', attorneys' and expert witness fees, costs of investigation and proof of facts, court costs, other litigation expenses and travel and living expenses.
Franchisor shall have the right to defend any such claim against it.
This indemnity shall continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.
Source: Item 23 — RECEIPT (FDD pages 54–209)
What This Means (2025 FDD)
According to Learningrx's 2025 Franchise Disclosure Document, a franchisee is generally required to indemnify Learningrx and its related entities against claims and liabilities arising from the operation of the business, use of the Learningrx marks and system in a manner not following the agreement, or violation of laws. However, this indemnification does not apply to claims resulting from the willful misconduct or gross negligence of any indemnified person.
In practical terms, this means that if Learningrx or its related parties engage in intentional wrongdoing or gross negligence that leads to a claim, the franchisee is not responsible for covering the costs of those claims through indemnification. The franchisee's responsibility to indemnify Learningrx is limited to situations where the franchisee's own actions or failure to comply with the franchise agreement or applicable laws lead to claims against Learningrx.
This provision offers a degree of protection for the Learningrx franchisee, ensuring they are not held liable for the franchisor's own misconduct. However, it is important to note that the franchisee still bears the risk of liability for their own actions and must operate the business in compliance with the franchise agreement and all applicable laws to avoid indemnification obligations. Franchisees should seek legal counsel to fully understand the scope of this indemnification clause and its implications for their business operations.