Does Best Western anticipate being subject to legal proceedings and claims in the future?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
AND MEMBER FURTHER AGREES THAT BEST WESTERN'S LIABILITY FOR ANY DAMAGES SHALL BE LIMITED TO THE AMOUNT OF MEMBERSHIP FEES ACTUALLY PAID BY MEMBER IN CONNECTION WITH THE PROPERTY, DURING A SINGLE FISCAL YEAR IN WHICH THE BREACH OR DEFAULT OCCURRED.
N. Indemnification
Member shall indemnify, defend, and hold harmless Best Western and its subsidiaries and affiliates and its and their respective directors, officers, employees, agents, representatives, insurers, and other Members (hereinafter collectively referred to as "Indemnitees" and individually referred to as "Indemnitee"), from any and all claims, demands, suits, actions, proceedings, losses, liabilities, penalties, causes of action, and damages of every kind and description, including but not limited to any attorneys' fees and costs and expenses (hereinafter collectively referred to as "Losses" and individually referred to as "Loss"), whether or not a lawsuit or other type of action is filed, which may be brought, made, alleged, or claimed by a third party arising out of (or contributed to, in whole or in part, by reason of) any alleged act, omission, fault, mistake, wrongdoing, or negligence of Member or its directors, officers, employees, agents, representatives, or contractors, in connection with, relating to, or incident to the use, condition, or operation of the Property. For the avoidance of doubt, this shall include but is not limited to Losses arising out of, in connection with, relating to, or incident to: (a) Member's (or its directors', officers', employees', agents', representatives', or contractors') failure to comply with applicable law; (b) workers' compensation claims, unemployment disability compensation claims, or discrimination or other employmentrelated claims of employees or contractors of Member; (c) breach of contract claims, data privacy claims, PCI-DSS claims, consumer deception claims, or tort claims; and (d) infringement related to intellectual property rights (e.g., patent, trademark, copyright). Member shall not settle any Loss against an Indemnitee without the Indemnitee's prior written consent.
O. Attorneys' Fees
In the event that Member breaches any obligation to Best Western, Member is liable to Best Western for all attorneys' fees, costs and expenses incurred by Best Western in connection with the breach or violation, whether or not suit is filed.
P. Best Interests of Best Western
Membership shall be subject to cancellation or termination in accordance with Best Western's Regulatory Documents when the continuation of this Membership would be contrary to the interests of Best Western, its affiliates, subsidiaries or Members, or the public image, goodwill or reputation of any such entity or the "Best Western" name and Best Western Identifying Marks. Such reasons include, by way of example only, conduct of an owner, lessee, Voting Member, or management staff that includes offensive, inappropriate, or discriminatory acts or speech.
Q.
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
Based on the 2025 Franchise Disclosure Document, Best Western outlines several scenarios where legal claims and proceedings could arise, primarily concerning the franchisee's conduct and adherence to Best Western's standards. Specifically, Best Western requires franchisees to indemnify them against any claims, losses, or liabilities resulting from the franchisee's actions, omissions, or negligence related to the operation of the property. This includes, but is not limited to, failure to comply with laws, employment-related claims, breach of contract claims, data privacy claims, consumer deception claims, tort claims, and intellectual property infringement. This broad indemnification clause suggests that Best Western anticipates the possibility of facing legal issues stemming from the actions of its franchisees.
Furthermore, the FDD stipulates that franchisees are liable for Best Western's attorney's fees, costs, and expenses if the franchisee breaches any obligation to Best Western, regardless of whether a lawsuit is filed. This highlights the potential for legal disputes arising from contractual breaches. Additionally, Best Western emphasizes that membership can be canceled or terminated if its continuation would be contrary to the interests of Best Western, its affiliates, subsidiaries, members, or the public image, goodwill, or reputation of the Best Western brand. Such reasons include offensive, inappropriate, or discriminatory acts or speech by the owner, lessee, voting member, or management staff, which could lead to legal challenges.
Best Western also mandates that franchisees maintain various insurance policies, including public liability, property damage, automobile liability, and cyber liability, with Best Western named as an additional insured. Failure to maintain this insurance coverage can result in termination of membership and potential liability for claims and damages that would have been covered by the required insurance. These insurance requirements and the consequences of not meeting them further indicate the potential for legal and financial risks that Best Western anticipates and attempts to mitigate through its franchise agreement. The inclusion of specific clauses addressing legal jurisdictions and applicable laws, such as those related to the Washington Franchise Investment Protection Act and Minnesota state laws, also suggests an awareness of potential legal complexities and the need to protect its interests and brand standards across different regions.