Under what conditions can the Indemnifying Party NOT consent to the entry of any judgment or enter into any settlement without the written consent of the Indemnified Party for Bhc?
Bhc Franchise · 2025 FDDAnswer from 2025 FDD Document
The Indemnifying Party will have control over the Proceeding, including the right to settle; provided, however, the Indemnifying Party will not, absent the written consent of the Indemnified Party, consent to the entry of any judgment or enter into any settlement that: (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; or (ii) adversely affects the rights of the Indemnified Party under this Agreement, or (iii) does not release the Indemnified Party from all Proceedings and "Losses" (as defined in section 16.2(d) below) in respect thereof.
Source: Item 23 — Receipts (FDD pages 52–230)
What This Means (2025 FDD)
According to Bhc's 2025 Franchise Disclosure Document, the Indemnifying Party needs written consent from the Indemnified Party to settle a legal proceeding under specific conditions. These conditions are designed to protect the Indemnified Party from outcomes that could negatively impact their business or reputation.
Specifically, the Indemnifying Party cannot consent to any judgment or settlement that includes an admission of liability by the Indemnified Party. This prevents the Indemnified Party from being seen as responsible for any wrongdoing. Additionally, the Indemnifying Party cannot agree to any settlement that provides relief other than the payment of monetary damages for which the Indemnifying Party will be solely responsible. This ensures that the Indemnified Party does not have to bear any financial burden beyond what the Indemnifying Party covers.
Furthermore, the Indemnifying Party must obtain written consent if the settlement adversely affects the rights of the Indemnified Party under the Franchise Agreement. This protects the Indemnified Party's contractual rights and business interests. Finally, the Indemnifying Party needs consent if the settlement does not fully release the Indemnified Party from all proceedings and associated losses. This ensures the Indemnified Party is completely free from any further legal or financial repercussions related to the matter.