Under what conditions can the Indemnifying Party NOT settle a Proceeding without 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 Proceeding under specific conditions. The Indemnifying Party cannot consent to any judgment or settlement that includes any admission of liability on the part of the Indemnified Party. This protects the Indemnified Party from actions that could negatively impact their reputation or future legal standing.
Additionally, the Indemnifying Party needs written consent if the settlement provides relief other than the payment of monetary damages for which the Indemnifying Party will be solely liable. This ensures that the Indemnified Party is not subject to non-monetary obligations or penalties as part of the settlement.
Finally, the Indemnifying Party must obtain written consent if the settlement does not release the Indemnified Party from all Proceedings and "Losses." This provision aims to provide a complete and final resolution for the Indemnified Party, preventing further legal action or financial responsibility related to the matter. These conditions ensure that the Indemnified Party maintains control over settlements that could significantly affect their rights, reputation, or financial obligations under the franchise agreement.