Does the Mr. Sandless franchise agreement diminish the franchisee's obligation to indemnify the Indemnitees if the franchisor undertakes the defense of a claim?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
You agrees not to incur or contract any debt or obligation on behalf of us or commit any act, make any representation, or advertise in any manner which may adversely affect any right of Franchisor or be detrimental to Franchisor or other franchisees of Franchisor. We does not assume any liability, and will not be considered liable, for any agreements, representations, or warranties made by you which are not expressly authorized under this Agreement. We will not be obligated for any damages to any person or property which directly or indirectly arise from or relate to your operations of the Franchised Business. Pursuant to the above, you agree to indemnify Franchisor and hold Franchisor harmless from any and all liability, loss, attorneys' fees, or damage Franchisor may suffer as a result of claims, demands, taxes, costs, or judgments against Franchisor arising out of any allegation of an agent, partner, or employment relationship.
Source: Item 22 — CONTRACTS (FDD page 42)
What This Means (2025 FDD)
Based on the 2025 Mr. Sandless Franchise Disclosure Document, the excerpts provided do not specify whether the franchisee's obligation to indemnify is diminished if Mr. Sandless undertakes the defense of a claim. However, the agreement does state that the franchisee agrees to indemnify Mr. Sandless and hold Mr. Sandless harmless from any liability, loss, attorney's fees, or damage Mr. Sandless may suffer as a result of claims, demands, taxes, costs, or judgments against Mr. Sandless arising out of any allegation of an agent, partner, or employment relationship. This indemnification clause highlights the franchisee's responsibility for liabilities arising from their business operations.
The franchise agreement also emphasizes the independent contractor relationship between the franchisee and Mr. Sandless. The franchisee is responsible for securing confidentiality and non-competition agreements from their employees and third parties who have access to Mr. Sandless's confidential information. Failure to do so results in the franchisee indemnifying Mr. Sandless for any losses or damages resulting from the failure to obtain these agreements.
Since the provided excerpts do not explicitly address the scenario where Mr. Sandless takes over the defense of a claim, it is important for a prospective franchisee to seek clarification from Mr. Sandless regarding this specific situation. Understanding the conditions under which the indemnification obligations might be affected by Mr. Sandless's actions is crucial for assessing the potential financial risks associated with the franchise.