Under what conditions can the Indemnifying Party NOT consent to a judgment or 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 before consenting to a judgment or settlement under specific conditions. These conditions are designed to protect the Indemnified Party from potential liabilities or adverse effects.
Specifically, the Indemnifying Party cannot consent to any judgment or settlement that (i) includes any admission of liability on the part of the Indemnified Party, or provides relief other than the payment of monetary damages for which the Indemnifying Party is solely responsible, (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 related to the matter.
This provision ensures that the Indemnified Party retains control over decisions that could impact their legal standing, rights, and financial exposure. It is a fairly standard clause in franchise agreements, intended to balance the Indemnifying Party's control over the legal proceedings with the Indemnified Party's need to protect their interests. A prospective Bhc franchisee should understand these conditions to be aware of their rights and obligations in case of any third-party claims or legal proceedings.