Under the Stretch Zone franchise agreement, what claims or inquiries must the franchisee defend the Indemnified Parties against?
Stretch_Zone Franchise · 2025 FDDAnswer from 2025 FDD Document
(b) You agree to defend the Indemnified Parties against any and all claims asserted or inquiries made (formally or informally), or legal actions, investigations, or other proceedings brought, by a third party and directly or indirectly arising out of or relating to any matter described in Subsection 8.15(a)(1) through (5) above (collectively, "Proceedings"), including those alleging the Indemnified Party's negligence, gross negligence, willful misconduct and/or willful wrongful omissions. Each Indemnified Party may at your expense defend and otherwise respond to and address any claim asserted or inquiry made, or Proceedings brought, that is subject to this Section 8.15 (instead of having you defend it as required above), and agree to settlements or take any other remedial, corrective, or other actions, for all of which defense and response costs and other Losses you are solely responsible, subject to Section 8.15(c). An Indemnified Party need not seek recovery from any insurer or other third party, or otherwise mitigate its Losses, in order to maintain and recover fully a claim against you, and you agree that a failure to pursue a recovery or mitigate a Loss will not reduce or alter the amounts that an Indemnified Party may recover from you under this Section 8.15. Your obligations under this Section 8.15 will continue in full force and effect subsequent to and notwithstanding this Agreement's expiration or termination.
Source: Item 8 — Receipts. Any sale made must be in compliance with § 683(8) of the Franchise Sale Act (N.Y. Gen. Bus. L. § 680 et seq.), which describes the time period a Franchise Disclosure Document (offering prospectus) must be provided to a prospective franchisee before a sale may be made. New York law requires a franchisor to provide the Franchise Disclosure Document at the earliest of the first personal meeting or ten (10) business days before the execution of the franchise or other agreement or the payment of any consideration that relates to the franchise relationship. (FDD pages 99–263)
What This Means (2025 FDD)
According to the 2025 Stretch Zone Franchise Disclosure Document, the franchisee is responsible for defending the Indemnified Parties against claims or inquiries made by a third party. These claims or inquiries can be formal or informal, and may include legal actions, investigations, or other proceedings. These actions must directly or indirectly arise out of or relate to any matter described in Subsection 8.15(a)(1) through (5).
The claims that the Stretch Zone franchisee must defend against may allege negligence, gross negligence, willful misconduct, and/or willful wrongful omissions of the Indemnified Party. The Indemnified Parties can defend themselves and respond to any claim or inquiry, and can agree to settlements or take remedial actions at the franchisee's expense. The franchisee is solely responsible for all defense and response costs and other losses, subject to Section 8.15(c).
The Indemnified Party does not need to seek recovery from any insurer or mitigate its losses before making a claim against the franchisee. The franchisee's obligations to defend the Indemnified Parties continue even after the franchise agreement expires or terminates. However, the franchisee is not obligated to indemnify the Indemnified Party for losses caused solely and directly by the Indemnified Party's willful misconduct or gross negligence, as long as the claim is not based on vicarious liability or Stretch Zone's failure to compel the franchisee to comply with the agreement.