How are payments made by an indemnified party adjusted based on insurance benefits received for Bhc?

According to Bhc's 2025 Franchise Disclosure Document, any payments made by an indemnified party will be net of benefits received from insurance related to the claims. This means that if an indemnified party, such as a franchisee or master franchisee, receives insurance benefits to cover a claim, the amount they are entitled to receive from the indemnifying party (Bhc or the franchisee/master franchisee, depending on the situation) will be reduced by the amount of those insurance benefits.

This provision ensures that the indemnified party does not receive double compensation for the same loss—once from the insurance company and again from the indemnifying party. It aligns with standard business practices to prevent unjust enrichment. The indemnified party is obligated to submit all claims to their insurers in a timely manner to facilitate this process.

For a prospective Bhc franchisee, this means that in the event they are indemnified for a loss, they must first seek coverage from their insurance policies. The amount Bhc (or the franchisee, if they are the indemnifying party) is required to pay will be reduced by any insurance benefits the franchisee receives. This clause encourages franchisees to maintain adequate insurance coverage, as it directly impacts the amount they can recover from Bhc in an indemnification scenario.