Under what circumstances will a Marble Slab Creamery Manager NOT be indemnified by the Company?
Marble_Slab_Creamery Franchise · 2025 FDDAnswer from 2025 FDD Document
10.1 Indemnification of Manager. The Company shall indemnify each Manager from and against any judgments, settlements, penalties, fines or expenses incurred in a proceeding to which a Manager is a party because he, she or it is, or was, a Manager; provided, that a Manager shall not be indemnified from or on account of acts or omissions of the Manager finally adjudicated to be a breach of this Agreement, intentional misconduct or a knowing violation of law by the Manager, or any transaction with respect to which it was finally adjudged that such Manager received a benefit in money, property or services to which such Manager was not legally entitled**.** The right to indemnification conferred in this Section 10.1 shall be a contract right and shall include the right to be paid by the Company the expenses incurred in
defending any such proceeding in advance of its final disposition; provided, that the payment of such expenses in advance of the final disposition of a proceeding shall be made only upon delivery to the Company of an undertaking, by or on behalf of such Manager to repay all amounts so advanced if it shall ultimately be determined that such Manager is not entitled to be indemnified under this Section 10.1 or otherwise.
Source: Item 23 — RECEIPT (FDD pages 101–346)
What This Means (2025 FDD)
According to Marble Slab Creamery's 2025 Franchise Disclosure Document, the company will indemnify its managers against expenses incurred in legal proceedings, but this protection has specific limits. A Marble Slab Creamery manager will not be indemnified if they are found to have breached the Franchise Agreement, engaged in intentional misconduct, or knowingly violated the law. Additionally, indemnification is voided if the manager received benefits (money, property, or services) to which they were not legally entitled.
This means that while Marble Slab Creamery offers a degree of protection to its managers, this protection is not absolute. Managers are expected to act within the bounds of the law and the franchise agreement. If a manager's actions lead to legal issues due to their own misconduct or illegal activities, they will be personally responsible for the resulting expenses.
This type of indemnification clause is common in franchise agreements, as it balances the need to protect managers from liabilities incurred while performing their duties with the need to hold them accountable for their own actions. Prospective Marble Slab Creamery franchisees should carefully review this section of the Franchise Agreement to understand the scope and limitations of the indemnification provided.