Is a Better Blend franchisee allowed to settle an Action without the Indemnitee's consent?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
Franchisee shall indemnify and defend (with counsel reasonably acceptable to BBF) BBF, its parent entities, subsidiaries and affiliates, and their respective owners, directors, officers, employees, agents, successors and assignees (collectively, "Indemnitees") against all Losses in any Action by or against BBF and/or any Indemnitee directly or indirectly related to, or alleged to arise out of, the development or operation of the Business (including any Data Security Event), or any act or omission of Franchisee or any of Franchisee's Owners, officers, directors, employees or agents. Notwithstanding the foregoing, Franchisee shall not be obligated to indemnify an Indemnitee from Actions which Franchisee proves arose solely as a result of any Indemnitee's intentional misconduct or negligence. Any delay or failure by an Indemnitee to notify Franchisee of an Action shall not relieve Franchisee of its indemnity obligation except to the extent (if any) that such delay or failure materially prejudices Franchisee. Franchisee shall not settle an Action without the consent of the Indemnitee. This indemnity will continue in effect after this Agreement ends.
- 16.2 Assumption. An Indemnitee may elect to assume the defense of any Action subject to this indemnification, and control all aspects of defending the Action, including negotiations and settlement, at Franchisee's expense. Such an undertaking shall not diminish Franchisee's obligation to indemnify the Indemnitees.
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to the 2024 Better Blend Franchise Disclosure Document, a franchisee is not allowed to settle an Action without the consent of the Indemnitee. The FDD specifies that the franchisee must indemnify and defend Better Blend against losses in any Action related to the development or operation of the business. However, the franchisee is not obligated to indemnify Better Blend from Actions that the franchisee proves arose solely from Better Blend's intentional misconduct or negligence.
Better Blend may elect to assume the defense of any Action and control all aspects of defending it, including negotiations and settlement, at the franchisee's expense. This does not diminish the franchisee's obligation to indemnify Better Blend.
This means that if a claim arises against Better Blend related to the franchisee's business, the franchisee is responsible for covering the costs, unless it's proven that Better Blend was intentionally negligent. The franchisee cannot independently settle such a claim without Better Blend's approval, giving Better Blend control over the legal strategy and financial implications of any settlement.