Can the Pearce Bespoke Franchisor control litigation that might result in liability of the Franchisee?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisor will indemnify Franchisee against and reimburse Franchisee for any obligations or liability for damages attributable to agreements, representations or warranties of Franchisor, or custom by Franchisor's negligence or willful action, and for costs Franchisee reasonably incurs in the defense of any such claim brought against it or in any action in which it is named as a party, provided that Franchisor will have the right to participate in and, to the extent Franchisor deems necessary, to control any litigation or proceeding which might result in liability of or expense to Franchisee subject to such indemnification.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to the 2025 Pearce Bespoke Franchise Disclosure Document, the franchisor, under certain conditions, retains the right to control litigation that could result in liability or expense to the franchisee. Specifically, this control applies when the franchisor is providing indemnification to the franchisee.
Pearce Bespoke will indemnify the franchisee against obligations or liability for damages attributable to the franchisor's agreements, representations, warranties, negligence, or willful action. In such cases, Pearce Bespoke has the right to participate in and, if deemed necessary, control any litigation or proceeding that might lead to liability or expense for the franchisee, subject to this indemnification.
This clause ensures that Pearce Bespoke can protect its interests and brand reputation when it is potentially liable for damages related to the franchisee's operations. However, this control is conditional, as it only applies when the franchisor is providing indemnification. The franchisee should carefully review the circumstances under which indemnification is provided and understand the extent of the franchisor's control over litigation in those situations.
It's important for a prospective Pearce Bespoke franchisee to seek legal counsel to fully understand the implications of this clause and how it might affect their rights and responsibilities in the event of a legal dispute.