While indemnification clauses are abundant in the franchise industry, it remains to be a legal concept that very few understand. Unfortunately, this leads to many franchise owners assuming legal responsibility for liabilities that are out of their control. In addition, it prevents several franchisors from negotiating reasonable concessions that would otherwise be easy to understand.
What is Indemnification?
Basically, indemnification is the obligation for someone to assume liability for a claim against someone else. Typically, in a franchise agreement, the franchisor is not to be held liable for any claims related to the franchisee during the term of the franchise agreement or after expiration.
Negotiating the Indemnification Clause
When you negotiate the terms and conditions of your franchise agreement, it can be easy to overlook the indemnification clause. This can prove to be a critical mistake. Even though this clause is usually buried somewhere in the back of the agreement, it is in fact one of the most important elements of the entire contract. Although all negotiations require careful consideration, the specific language here is critical.
At Mulcahy LLP, we are an experienced franchise law firm that provides help for franchisors in finding comprehensive solutions to a number of related legal issues. If you are considering investing in a franchise and you need help making sense of the legal risks associated with your franchise agreement, we encourage you to inquire about our Mulcahy LLP representation of prospective franchise owners. For more information, please give us a call at 000-000-0000 or send us your contact information online today.
