Can the Pearce Bespoke Franchisor participate in litigation that might result in liability of the Franchisee?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
Franchisee will indemnify Franchisor against and will reimburse Franchisor for all obligations and damages arising out of the operation of Franchisee's business, including all costs Franchisor reasonably incurs in the defense of any such claim brought against it or in any action in which it is named as a party (including reasonable attorneys' fees), including without limitation any claims brought against it related to Franchisee's violations of Privacy Laws. Franchisor will have the right to defend any such claim against it. 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 retains the right to participate in litigation that could affect the franchisee's liability. Specifically, Pearce Bespoke will indemnify the franchisee against obligations or liability for damages attributable to the franchisor's agreements, representations, warranties, negligence, or willful actions.
Pearce Bespoke maintains the right to participate in and control any litigation or proceeding if it deems necessary, especially if such litigation might result in liability or expense to the franchisee, provided that the situation falls under the franchisor's indemnification responsibilities. This control extends to any claims brought against Pearce Bespoke related to the franchisee's violations of Privacy Laws, for which the franchisee will indemnify the franchisor.
This clause ensures that Pearce Bespoke can protect its brand and reputation by having a say in legal matters that could impact both the franchisor and the franchisee. However, it also means that a franchisee might have to relinquish some control over their legal defense in certain situations, as Pearce Bespoke's interests could take precedence. The franchisee is responsible for all losses or damages arising from the operation of their business or from their acts or omissions, and must indemnify Pearce Bespoke against any claims arising from these activities.