Under what conditions is an Eligible Participant in the Crowne Plaza franchise required to defend or settle a third-party claim against AT&T, its Affiliates, and their respective employees, directors, subcontractors, and suppliers?
Crowne_Plaza Franchise · 2025 FDDAnswer from 2025 FDD Document
- 7.2 Eligible Participant's Obligations. Eligible Participant agrees at its expense to defend and either to settle any third-party claim against AT&T, its Affiliates and its and their respective employees, directors, subcontractors and suppliers or to pay all damages that a court finally awards against such parties for a claim that: (a) is in connection with Eligible Participant's, its Affiliate's or a User's access to or use of the Services and the claim is not the responsibility of AT&T under Section 7.1; (b) alleges a material breach by Eligible Participant, its Affiliate or a User of a Software license agreement.
- 7.4 Notice and Cooperation. The party seeking defense or settlement of a third-party claim under this Section 7 will provide notice to the other party promptly upon learning of any claim for which defense or settlement may be sought, but failure to do so will have no effect except to the extent the other party is prejudiced by the delay. The party seeking defense or settlement will allow the other party to control the defense and settlement of the claim and will reasonably cooperate with the defense. The defending party will use counsel reasonably experienced in the subject matter at issue and will not settle a claim without the written consent of the party being defended, which consent will not be unreasonably withheld or delayed, except that no consent will be required to settle a claim where relief against the party being defended is limited to monetary damages that are paid by the defending party under this Section 7.
Source: Item 23 — Receipts (FDD pages 100–424)
What This Means (2025 FDD)
According to Crowne Plaza's 2025 Franchise Disclosure Document, an Eligible Participant (franchisee) has specific obligations regarding third-party claims involving AT&T and related parties. The franchisee is responsible for defending and settling claims at their own expense under certain conditions. This obligation extends to AT&T, its Affiliates, and their respective employees, directors, subcontractors, and suppliers.
The franchisee's responsibility arises when a third-party claim is connected to the franchisee's, its Affiliate's, or a User's access to or use of AT&T's services, provided that the claim is not AT&T's responsibility under Section 7.1 of the agreement. Additionally, the franchisee is obligated to defend and settle claims alleging a material breach of a software license agreement by the franchisee, its Affiliate, or a User.
The FDD also outlines procedures for handling such claims, including providing prompt notice of any claim for which defense or settlement may be sought. The party seeking defense or settlement must allow the other party to control the defense and settlement of the claim and must reasonably cooperate with the defense. The defending party is required to use experienced counsel and cannot settle a claim without the written consent of the party being defended, unless the relief is limited to monetary damages paid by the defending party. This section of the FDD ensures that both Crowne Plaza franchisees and AT&T have a clear understanding of their responsibilities in the event of third-party claims related to the services provided under their agreement.