For Mr. Sandless, what costs are included in 'Claims' for indemnification, beyond actual damages?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
or any other form of defamation of us, the System or any franchisee or developer operating under the System, by you or by any of your principals. For purposes of this indemnification, Claims shall 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 through you to us. We shall have the right to defend any such Claim against us in such manner as we deem appropriate or desirable in our sole discretion. Such an undertaking by us shall, in no manner or form, diminish your and each of your principals' obligation to indemnify the Indemnitees and to hold them harmless. This indemnity shall continue in full force and effect subsequent to and notwithstanding the expiration or termination of this Agreement.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
According to the 2025 Mr. Sandless FDD, the definition of 'Claims' for indemnification extends beyond actual damages to include several other financial obligations. Specifically, 'Claims' encompass all obligations, covering actual, consequential, punitive, and other damages.
Furthermore, the definition includes costs reasonably incurred in defending any action. This encompasses a range of expenses, such as attorneys', attorney assistants', and expert witness fees. It also incorporates costs related to the investigation and proof of facts, court costs, other litigation expenses, and travel and living expenses. The inclusion of these costs applies regardless of whether such claims exceed the amount of insurance coverage available to Mr. Sandless through the franchisee.
Mr. Sandless retains the right to defend any claim against them in a manner they deem appropriate. However, this does not diminish the franchisee's obligation to indemnify and hold harmless the indemnitees. This indemnification obligation remains in effect even after the termination or expiration of the franchise agreement. This means that even after the franchise relationship ends, the franchisee may still be responsible for covering these costs related to claims.