What is the Better Blend franchisee's responsibility regarding settling an Action related to indemnification?
Better_Blend Franchise · 2024 FDDAnswer from 2024 FDD Document
- 16.1 Indemnity. 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.
ARTICLE 17. DISPUTE RESOLUTION
Source: Item 22 — CONTRACTS (FDD page 43)
What This Means (2024 FDD)
According to Better Blend's 2024 Franchise Disclosure Document, a franchisee is not allowed to settle an Action without the consent of the Indemnitee. An "Action" is defined as any action, suit, proceeding, claim, demand, governmental investigation, governmental inquiry, or judgment or appeal thereof, whether formal or informal.
Better Blend's franchise agreement includes an indemnification clause, which means the franchisee agrees to protect Better Blend (the Indemnitee) against losses from claims or lawsuits related to the franchisee's business operations. However, the franchisee is not required to indemnify Better Blend from Actions which the franchisee proves arose solely as a result of any Indemnitee's intentional misconduct or negligence.
Better Blend, as the Indemnitee, has the option to assume the defense of any Action and control all aspects of defending the Action, including negotiations and settlement, at the franchisee's expense. This does not, however, diminish the franchisee's obligation to indemnify Better Blend.