Does the indemnification agreement in the Mr. Sandless release require payment to the claimant as a condition precedent to recovery?
Mr_Sandless Franchise · 2025 FDDAnswer from 2025 FDD Document
- Releasor hereto represents and warrants that no portion of any claim, right, demand, obligation, debt, guarantee, or cause of action released hereby has been assigned or transferred by Releasor party to any other party, firm or entity in any manner including, but not limited to, assignment or transfer by subrogation or by operation of law. In the event that any claim, demand or suit shall be made or institute against any released party because of any such purported assignment, transfer or subrogation, the assigning or transferring party agrees to indemnify and hold such released party free and harmless from and against any such claim, demand or suit, including reasonable costs and attorneys' fees incurred in connection therewith. It is further agreed that this indemnification and hold harmless agreement shall not require payment to such claimant as a condition precedent to recovery under this paragraph.
Source: Item 23 — RECEIPTS (FDD pages 42–167)
What This Means (2025 FDD)
According to Mr. Sandless's 2025 Franchise Disclosure Document, the indemnification agreement does not require payment to the claimant as a condition precedent to recovery. This means that if a claim, demand, or suit is made against a released party due to an assignment, transfer, or subrogation, the assigning or transferring party is obligated to indemnify and hold the released party harmless. This protection extends to covering reasonable costs and attorneys' fees associated with the claim, demand, or suit.
This provision is favorable for Mr. Sandless franchisees because it clarifies that the indemnification obligation arises regardless of whether the claimant has already been paid. The franchisee is protected from related claims, demands, or suits, and the responsible party must cover the associated costs and legal fees.
In practical terms, this means a Mr. Sandless franchisee can pursue recovery under the indemnification agreement without first having to settle or pay the claimant. This can be a significant benefit, as it allows the franchisee to address the underlying issue and seek indemnification for costs incurred without the burden of upfront payments to the claimant. This clause aims to provide a more streamlined and accessible path to recovery for the franchisee in such situations.