As defined in the Best Western FDD, what does the term 'Loss' encompass?
Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
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.
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, the term 'Losses' includes a wide range of potential financial and legal burdens that a member (franchisee) may face. Specifically, 'Losses' encompasses all claims, demands, suits, actions, proceedings, liabilities, penalties, causes of action, and damages of every kind. This broad definition extends to include attorneys' fees, costs, and expenses, regardless of whether a lawsuit is formally filed.
This definition is crucial because it outlines the scope of the indemnification that a Best Western member provides to Best Western and its affiliates. Essentially, if a third party brings a claim against Best Western due to an alleged act, omission, fault, mistake, wrongdoing, or negligence by the member or their staff in connection with the operation of the property, the member is responsible for covering all associated 'Losses'.
The FDD provides examples of situations that could lead to such losses, including failure to comply with applicable laws, workers' compensation claims, breach of contract claims, data privacy claims, and intellectual property infringement claims. Furthermore, the member cannot settle any Loss against Best Western without Best Western's prior written consent, giving Best Western control over the handling of such claims. This indemnification clause places a significant financial responsibility on the Best Western franchisee, highlighting the importance of maintaining adequate insurance coverage and adhering to all legal and operational standards to minimize the risk of triggering this clause.