factual

What is the Bevaris Alliance Franchisor's obligation to provide written notice of a claim to the Franchisee?

Bevaris_Alliance Franchise · 2024 FDD

Answer from 2024 FDD Document

  • 21.4 Liability under this indemnity is conditional on Franchisor discharging the following obligations. If any third party makes a claim, or notifies an intention to make a claim, against Franchisor which may reasonably be considered likely to give rise to a liability under this indemnity (Claim), Franchisor shall:
    • (a) as soon as reasonably practicable, give written notice of the Claim to Franchisee, specifying the nature of the Claim in reasonable detail;
    • (b) not make any admission of liability, agreement or compromise in relation to the Claim without the prior written consent of Franchisee (such consent not to be unreasonably conditioned, withheld or delayed), provided that Franchisor may settle the Claim (after giving prior written notice of the terms of settlement (to the extent legally possible) to Franchisee, but without obtaining Franchisee's consent) if Franchisor reasonably believes that failure to settle the Claim would be prejudicial to it in any material respect;
    • (c) give Franchisee and its professional advisers access at reasonable times (on reasonable prior notice) to its premises and its officers, directors, employees, agents, representatives or advisers, and to any relevant assets, accounts, documents and records within the power or control of Franchisor, so as to enable Franchisee and its professional advisers to examine them and to take copies (at Franchisee's expense) for the purpose of assessing the Claim; and
    • (d) subject to Franchisee providing security to Franchisor to Franchisor's reasonable satisfaction against any claim, liability, costs, expenses, damages or losses which may be incurred, take such action as Franchisee may reasonably request to avoid, dispute, compromise or defend the Claim.

Source: Item 23 — RECEIPT (FDD pages 22–88)

What This Means (2024 FDD)

According to Bevaris Alliance's 2024 Franchise Disclosure Document, the franchisor has specific obligations regarding written notice of claims. If a third party makes a claim, or intends to make a claim, against Bevaris Alliance that could lead to liability under an indemnity, Bevaris Alliance must, as soon as reasonably possible, provide written notice of the claim to the franchisee. This notice must specify the nature of the claim in reasonable detail.

Furthermore, Bevaris Alliance is obligated not to admit any liability or make any agreements or compromises related to the claim without the franchisee's prior written consent. However, Bevaris Alliance can settle the claim without the franchisee's consent if they reasonably believe that not settling would be materially prejudicial to them, but only after giving the franchisee prior written notice of the settlement terms, to the extent legally possible.

In addition to providing written notice, Bevaris Alliance must allow the franchisee and their advisors access to its premises, officers, directors, employees, agents, representatives, advisors, relevant assets, accounts, documents, and records for examining and copying (at the franchisee's expense) to assess the claim. Also, Bevaris Alliance must take action as the franchisee may reasonably request to avoid, dispute, compromise, or defend the claim, provided that the franchisee provides security to Bevaris Alliance to their reasonable satisfaction against any potential liabilities, costs, expenses, damages, or losses.

Disclaimer: This information is extracted from the 2024 Franchise Disclosure Document and is provided for research purposes only. It does not constitute legal or financial advice. Consult with a franchise attorney before making any investment decisions.