What is the Indemnified Party prohibited from being liable for regarding Losses that are compromised or settled in violation of section 16.2 of the Bhc franchise agreement?

According to Bhc's 2025 Franchise Disclosure Document, the Indemnified Party will not be held liable for any Losses that are compromised or settled against the guidelines outlined in section 16.2 of the franchise agreement. This section pertains to the Indemnity agreement between the franchisee (or Master Franchisee) and Bhc.

Section 16.2 specifies conditions under which the Indemnifying Party (the party providing the indemnity) has control over legal proceedings, including the right to settle claims. However, this control is conditional. The Indemnifying Party cannot, without the written consent of the Indemnified Party, agree to any judgment or settlement that involves an admission of liability by the Indemnified Party, affects the Indemnified Party's rights under the agreement, or fails to release the Indemnified Party from all related proceedings and Losses.

This provision protects the Indemnified Party by ensuring they are not responsible for financial losses resulting from settlements made without their consent and that violate the terms of the indemnity agreement. It also incentivizes the Indemnifying Party to act in the best interests of both parties when handling legal proceedings and settlements. Franchisees should understand these conditions to protect their interests in case of legal claims.