What is a Best Western customer required to do if they believe they are entitled to indemnification from AutoClerk?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
- 4.3 Indemnification Procedure.
Each party shall promptly notify the other party in writing of any Action for which that party believes it is entitled to be indemnified.
The party seeking indemnification (the "Indemnitee") shall cooperate with the other party (the "Indemnitor") at the Indemnitor's sole cost and expense.
The Indemnitor shall immediately take control of the defense and investigation of the Action and shall employ counsel of its choice at the Indemnitor's sole cost and expense.
The Indemnitee's failure to perform any obligations under this Section 4 will not relieve the Indemnitor of its obligations except to the extent that the Indemnitor can demonstrate that it has been prejudiced as a result of that failure.
The Indemnitee may participate in the proceedings at its own cost and expense with counsel of its own choosing.
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, if a Best Western customer (referred to as "party" in the agreement) believes they are entitled to indemnification, they must promptly notify the other party (AutoClerk) in writing of any action for which they believe indemnification is warranted.
Furthermore, the customer seeking indemnification, termed the "Indemnitee," is obligated to cooperate with AutoClerk, referred to as the "Indemnitor," in the defense and investigation of the action. This cooperation is at AutoClerk's sole cost and expense. AutoClerk is required to immediately take control of the defense and investigation, employing counsel of its choice, also at its own expense.
Failure by the Best Western customer to fulfill these obligations does not automatically relieve AutoClerk of its indemnification duties. However, it may reduce AutoClerk's obligations if AutoClerk can demonstrate that it has been prejudiced as a result of the customer's failure to perform their obligations. The customer retains the right to participate in the proceedings with counsel of their choosing, but at their own cost and expense.
This process ensures that AutoClerk is informed promptly of any potential liabilities and can manage the legal defense, while also requiring the Best Western customer to assist in the process. This is a fairly standard practice in franchise agreements to ensure both parties are aware of potential issues and can work towards a resolution.