What limitations are placed on the Indemnifying Party's right to settle a Proceeding without the Indemnified Party's consent regarding a Bhc franchise?

According to Bhc's 2025 Franchise Disclosure Document, the Indemnifying Party, which is the party providing the indemnity, has control over legal proceedings, including the right to settle. However, this right is limited. The Indemnifying Party cannot enter into any settlement or consent to any judgment without the written consent of the Indemnified Party, which is the party being protected by the indemnity, if the settlement or judgment includes certain conditions.

Specifically, the Indemnifying Party cannot settle if the settlement (i) provides for any admission of liability on the part of the Indemnified Party or relief other than the payment of monetary damages for which the Indemnifying Party will be solely liable; (ii) adversely affects the rights of the Indemnified Party under the Franchise Agreement; or (iii) does not release the Indemnified Party from all Proceedings and Losses in respect thereof.

This means that Bhc franchisees have some protection against settlements that could harm their reputation, business rights, or financial standing, even if Bhc is handling the legal defense. The franchisee's consent is required for settlements that involve an admission of liability, affect their rights under the agreement, or don't fully release them from the legal claims. This is a fairly standard clause in franchise agreements, as it protects the franchisee from potentially unfavorable outcomes while still allowing the franchisor to manage the legal proceedings.