What is prohibited regarding settlement of claims for Atwell Suites hotels where indemnification could be sought under Section 9.0 without prior written consent?

According to the 2025 Atwell Suites Franchise Disclosure Document, a hotel franchisee is prohibited from entering into any settlement or compromising any claim where indemnification could be sought under Section 9.0 (Indemnification) without the prior written consent of IHG (InterContinental Hotels Group). This condition applies to claims where Atwell Suites as the hotel operator might seek protection or compensation from IHG for losses or liabilities.

This requirement means that an Atwell Suites franchisee must obtain IHG's approval before resolving any legal claims or disputes that could potentially trigger IHG's indemnification obligations. Indemnification typically covers situations where the franchisee might be liable for damages or losses due to specific events, such as breaches of contract or issues related to PMS (Property Management System) data. By requiring prior consent, IHG retains control over the settlement process and ensures that its interests are protected.

For a prospective Atwell Suites franchisee, this clause highlights the importance of clear communication and collaboration with IHG in managing legal risks. Failure to obtain IHG's written consent before settling a claim could jeopardize the franchisee's ability to seek indemnification, potentially leaving them responsible for covering the full cost of the settlement and any associated losses. This provision is a standard practice in franchising, allowing the franchisor to maintain brand consistency and protect its financial interests.