What is the timeframe for the Bevaris Alliance Franchisor to provide written notice of a Claim to the Franchisee?
Bevaris_Alliance Franchise · 2024 FDDAnswer 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 the 2024 Bevaris Alliance Franchise Disclosure Document, if a third party makes a claim against Bevaris Alliance that could lead to liability under the indemnity, Bevaris Alliance must provide written notice of the claim to the franchisee as soon as reasonably practicable. This notice should specify the nature of the claim in reasonable detail.
This means that if Bevaris Alliance faces a lawsuit or claim for something that the franchisee might be responsible for under the indemnity agreement, Bevaris Alliance is obligated to inform the franchisee promptly. The term "as soon as reasonably practicable" suggests that there isn't a fixed number of days, but rather that Bevaris Alliance must act quickly given the circumstances.
In addition to providing prompt notice, Bevaris Alliance is also required to refrain from making any admissions of liability or settling 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 detrimental to them, after giving the franchisee prior written notice of the terms of settlement to the extent legally possible. Furthermore, Bevaris Alliance must allow the franchisee access to relevant information and assistance in defending against the claim.
This clause protects the franchisee by ensuring they are informed of potential liabilities and have the opportunity to participate in the defense. However, the franchisee may need to provide security to Bevaris Alliance to cover potential costs or losses associated with the claim.