Under what conditions will a Pearce Bespoke franchisee be required to indemnify the franchisor?
Pearce_Bespoke Franchise · 2025 FDDAnswer from 2025 FDD Document
see acknowledges that the customer list of all Pearce Bespoke or commercial customers shall be the sole and exclusive property of Franchisor, and that Franchisee shall have no ownership rights or interest in the customer list. 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.
Source: Item 22 — CONTRACTS (FDD page 39)
What This Means (2025 FDD)
According to Pearce Bespoke's 2025 Franchise Disclosure Document, a franchisee is obligated to indemnify the franchisor under specific circumstances related to the franchisee's business operations and failure to secure confidentiality agreements. The franchisee will be responsible for covering the franchisor's obligations and damages that arise from the operation of the franchisee's business. This includes covering all costs the franchisor reasonably incurs while defending against any claim brought against it, even if the franchisor is only named as a party. These costs include reasonable attorney's fees.
Specifically, the franchisee's indemnification extends to claims related to violations of privacy laws. Additionally, if the franchisee fails to obtain signed Confidentiality/Non-Competition Agreements from employees, agents, or other relevant parties as required, the franchisee must indemnify and hold Pearce Bespoke harmless from any resulting liability, loss, attorney's fees, or damages suffered by the franchisor. This obligation underscores the importance of adhering to confidentiality protocols within the Pearce Bespoke franchise system.
This indemnification clause means a prospective Pearce Bespoke franchisee should be aware that they bear significant financial responsibility for legal and financial liabilities stemming from their business operations and any failures in maintaining confidentiality as mandated by the franchise agreement. The franchisee should ensure they understand and comply with all operational requirements and confidentiality obligations to mitigate the risk of incurring indemnification responsibilities.