What are some potential negative impacts that legal proceedings and claims could have on Best Western's business?
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.
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.
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, legal proceedings and claims could have several negative impacts on the company's business. One significant impact involves indemnification, where members are required to defend and hold Best Western harmless from any claims, losses, or liabilities arising from their actions or omissions related to the operation of the property. This includes attorneys' fees and costs, regardless of whether a lawsuit is filed. This broad indemnification clause means that franchisees could be responsible for covering Best Western's legal expenses in a wide range of situations.
Another potential impact is related to breaches of obligations. If a Best Western member breaches any obligation to Best Western, the member is liable for all attorneys' fees, costs, and expenses incurred by Best Western in connection with the breach, regardless of whether a lawsuit is filed. This could create a significant financial burden for franchisees who fail to meet their contractual obligations.
Furthermore, 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 and reputation of the brand. This includes offensive, inappropriate, or discriminatory acts or speech by the owner, lessee, voting member, or management staff. This provision highlights the importance of maintaining a positive public image and adhering to ethical standards to avoid potential legal and reputational repercussions for both the franchisee and Best Western.