Under what circumstances is a Best Western member required to indemnify Best Western and its affiliates?
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.
Source: Item 23 — Receipts (FDD pages 108–413)
What This Means (2025 FDD)
According to Best Western's 2025 Franchise Disclosure Document, a member must indemnify, defend, and hold harmless Best Western and its affiliates from any claims, demands, suits, actions, proceedings, losses, liabilities, penalties, causes of action, and damages, including attorneys' fees and costs, brought by a third party. This indemnification requirement arises from any alleged act, omission, fault, mistake, wrongdoing, or negligence by the member or their directors, officers, employees, agents, representatives, or contractors in connection with the use, condition, or operation of the property.
This broad indemnification extends to various scenarios, including failure to comply with applicable law, workers' compensation claims, unemployment disability compensation claims, discrimination or other employment-related claims, breach of contract claims, data privacy claims, PCI-DSS claims, consumer deception claims, tort claims, and infringement related to intellectual property rights such as patents, trademarks, and copyrights. The member is also prohibited from settling any claim against Best Western without the company's prior written consent.
In addition to the general indemnification clause, Best Western members must indemnify Best Western for all claims and damages that would have been covered by insurance if the member fails to maintain the required insurance policies. These policies include public liability and property damage, coverage for owned, non-owned, and hired automobiles, and cyber liability insurance. The insurance carrier must be rated no lower than "B+" by A.M. Best's Key Rating Guide and licensed to do business in the state where the member is located. Best Western International, Inc. must also be named as an additional insured on all insurance policies, covering both active and passive negligence for claims arising from acts occurring at or concerning the property.
This indemnification clause is a significant obligation for Best Western members, potentially exposing them to substantial financial liability for a wide range of issues related to the operation of their property. Prospective franchisees should carefully review these requirements and ensure they have adequate insurance coverage and risk management practices in place to mitigate potential liabilities. It is also advisable to consult with legal and insurance professionals to fully understand the scope of the indemnification obligations and how to best protect their interests.