Is the Indemnifying Party's duty to defend independent of its duty to indemnify for Bhc?

According to Bhc's 2025 Franchise Disclosure Document, the Indemnifying Party's duty to defend is independent of its duty to indemnify. This means that the obligation to provide a legal defense for the Indemnified Party exists separately from the obligation to cover any losses or damages.

For a prospective Bhc franchisee, this is significant because even if Bhc (as the Indemnifying Party in certain situations) is not ultimately liable for indemnification, they may still be required to provide a legal defense. This could involve covering legal fees, court costs, and other expenses related to defending the franchisee in a legal proceeding. The franchisee may also be required to submit claims to their insurers in a timely manner, and any payments made will be net of insurance benefits received.

This separation of duties provides an additional layer of protection for the Indemnified Party, as they are entitled to a defense regardless of the final outcome regarding indemnification. However, the Indemnifying Party's duty to defend is contingent upon the Indemnified Party providing reasonable notice of any claim or loss, although failure to do so will only release the Indemnifying Party from its obligations to the extent that it is materially prejudiced by such failure.