Under what circumstances will a Ledgers franchisee be required to indemnify the Indemnified Parties?
Ledgers Franchise · 2025 FDDAnswer from 2025 FDD Document
Any provision in the franchise agreement or related agreements requiring the franchisee to indemnify, reimburse, defend, or hold harmless the franchisor or other parties is hereby modified such that the franchisee has no obligation to indemnify, reimburse, defend, or hold harmless the franchisor or any other indemnified party for losses or liabilities to the extent that they are caused by the indemnified party's negligence, willful misconduct, strict liability, or fraud.
Source: Item 22 — CONTRACTS (FDD page 46)
What This Means (2025 FDD)
According to Ledgers' 2025 Franchise Disclosure Document, a franchisee's obligation to indemnify the franchisor or other indemnified parties is limited. Specifically, the franchisee is not required to provide indemnification for losses or liabilities that arise due to the negligence, willful misconduct, strict liability, or fraud of the indemnified party.
This modification to the standard indemnification clause is significant for prospective Ledgers franchisees. Indemnification clauses typically require the franchisee to protect the franchisor from various claims and liabilities. However, this provision offers some protection to the franchisee by ensuring they are not responsible for the franchisor's own wrongful actions.
This type of modification is not standard across all franchise systems. Franchisees should carefully review the indemnification clauses in any franchise agreement and understand their potential liabilities. The Ledgers franchise agreement appears to offer more protection to the franchisee in this regard compared to some other franchises.