Does the indemnification obligation of a Petro Stopping Center franchisee survive the termination of the franchise agreement?
Petro_Stopping_Center Franchise · 2025 FDDAnswer from 2025 FDD Document
20.7 Indemnification. You agree to defend, indemnify and hold harmless the Franchisor Indemnified Parties from all Claims based upon or arising out of: (a) your breach of this Agreement, including the representations and warranties set forth herein; (b) your ownership, development, or operation of the Petro Center; (c) your violation or alleged violation of, or noncompliance or alleged non-compliance with, any applicable laws, rules, or regulations (including any applicable employment or workplace-related laws, rules, or regulations); (d) the acts or omissions of you or any of your Owners or employees; or (e) any injuries, including death to persons or damages to or destruction of property, sustained or alleged to have been sustained in connection with or to have arisen out of or incidental to the Petro Center, your business and/or the performance of this Agreement by you, your Owners, agents, employees, and/or its subcontractors, their agents and employees, or anyone for whose acts they may be liable. Our right to indemnification hereunder shall exist regardless of whether or not: (x) a Claim is caused in whole or in part by the negligence of us, our Affiliates, representatives, or any of our or their employees, agents, invitees, or licensees; or (y) joint or several liability may be imposed upon us by applicable law. The provisions of this Section 20.7 shall survive the expiration or termination of this Agreement.
Source: Item 17 — RENEWAL TERMS. (FDD pages 208–228)
What This Means (2025 FDD)
According to the 2025 Petro Stopping Center Franchise Disclosure Document, the franchisee's indemnification obligations do indeed survive the expiration or termination of the franchise agreement. This means that even after the franchise agreement ends, the franchisee remains responsible for defending, indemnifying, and holding harmless the Franchisor Indemnified Parties from any claims arising from specific events.
The franchisee's indemnification extends to claims based on breaches of the agreement, the ownership or operation of the Petro Center, violations of laws or regulations, the franchisee's or their personnel's actions or omissions, and injuries or damages related to the Petro Center or the franchisee's business operations. This obligation exists regardless of whether the claim is caused by the negligence of Petro Stopping Center or its affiliates, or whether joint or several liability is imposed by law.
This survival clause has significant implications for a prospective Petro Stopping Center franchisee. It means that even after the franchise is sold or terminated, the franchisee could still be liable for past actions or events that occurred during the term of the agreement. This could include lawsuits, regulatory fines, or other claims that arise years after the franchise relationship has ended. Franchisees should carefully consider this long-term liability and ensure they have adequate insurance coverage to protect themselves.
Clauses that extend beyond the termination of a franchise agreement are relatively common in the franchise industry, particularly concerning financial obligations and protection of intellectual property. However, the scope and duration of these clauses can vary significantly. Therefore, prospective franchisees should seek legal counsel to fully understand the implications of all post-termination obligations outlined in the franchise agreement.