What is a Brueggers Bagels licensee required to do if a proposed settlement would result in liability or financial contribution by the licensee?

According to Brueggers Bagels' 2025 Franchise Disclosure Document, if a proposed settlement in a claim or demand were to result in liability or financial contribution by the licensee, Brueggers Bagels will not settle the claim, demand, or proceeding without the licensee's prior written approval. However, this approval cannot be unreasonably withheld or delayed by the licensee. This stipulation is part of the indemnification agreement, where the licensee agrees to defend, indemnify, and hold harmless Brueggers Bagels from any claims, expenses, losses, or liabilities arising from the licensee's operations.

This requirement ensures that Brueggers Bagels franchisees have a say in any settlement that could directly impact their financial obligations. It prevents the franchisor from agreeing to settlements that might impose unreasonable financial burdens on the franchisee without their consent. The clause protects the franchisee's interests while still allowing Brueggers Bagels to manage the legal defense and settlement negotiations.

However, the stipulation that the licensee's approval cannot be "unreasonably withheld or delayed" introduces a degree of subjectivity. What constitutes "unreasonable" behavior could be a point of contention in future disputes. Franchisees should carefully consider this aspect and seek legal counsel to fully understand their rights and obligations under this clause. It is also important to maintain open communication with Brueggers Bagels during any settlement negotiations to ensure a mutually agreeable outcome.