What conditions must Carls' as the Indemnified Party meet to be eligible for indemnification from Olo regarding a third-party claim?
Carls Franchise · 2024 FDDAnswer from 2024 FDD Document
The Indemnified Party must (a) promptly notify the Indemnifying Party in writing of any third-party claim (provided that a failure to promptly notify will not relieve the Indemnifying Party of its indemnification obligations, except to the extent it has been prejudiced by such failure); (b) reasonably cooperate with the Indemnifying Party in the defense of the matter; and (c) give the Indemnifying Party primary control of the defense of the matter and negotiations for its settlement.
The Indemnified Party may, at its own expense, join in the defense with counsel of its choice.
The Indemnifying Party may not enter into a settlement unless it (i) involves only the payment of monetary damages by the Indemnifying Party, and (ii) includes a complete release of liability in favor of the Indemnified Party; any other settlement will be subject to the written consent of the Indemnified Party (not to be unreasonably withheld).
Source: Item 23 — RECEIPTS (FDD pages 80–480)
What This Means (2024 FDD)
According to Carls's 2024 Franchise Disclosure Document, if Carls' is the Indemnified Party and seeks indemnification from Olo regarding a third-party claim, Carls' must meet certain conditions. These conditions ensure that Olo, as the Indemnifying Party, is able to effectively manage the defense and settlement of any claim.
Specifically, Carls' must promptly notify Olo in writing of any third-party claim. However, a delay in notification will only relieve Olo of its indemnification obligations if Olo has been prejudiced by the delay. Carls' must also reasonably cooperate with Olo in the defense of the matter. Furthermore, Carls' must give Olo primary control over the defense and negotiations for settling the claim.
Carls' has the option to join in the defense with counsel of its choosing, but at its own expense. Olo cannot enter into a settlement unless it involves only monetary damages paid by Olo and includes a complete release of liability in favor of Carls'. Any other settlement requires Carls' written consent, which cannot be unreasonably withheld. These conditions are designed to balance the rights and responsibilities of both parties in the event of a third-party claim, ensuring a fair and efficient resolution process.