What is the Dq Treat party's obligation regarding providing notice of a claim for indemnification?

According to the 2025 Dq Treat Franchise Disclosure Document, each party involved in an indemnification claim must promptly notify the indemnitor (the party providing the indemnification) of any claim made under the indemnification section of the agreement. This means a Dq Treat franchisee must inform the other party (likely Dq Treat itself or a related entity) without delay if a claim arises for which indemnification may be sought.

In addition to providing prompt notice, the franchisee must grant the indemnitor control over the defense or settlement of the claim. However, the indemnitor is restricted from agreeing to any settlement that involves anything other than monetary damages. The franchisee is also obligated to fully cooperate with the indemnitor in the defense or settlement of the claim, and the indemnitor will cover the reasonable expenses associated with this cooperation.

This notification requirement is a standard practice in franchise agreements, as it allows the indemnifying party to assess the claim, control the defense strategy, and potentially mitigate damages. Failing to provide prompt notice could negatively impact the franchisee's ability to receive indemnification, although the document states that failure to provide prompt notice shall not relieve PAR of its indemnification obligations, unless such delay results in material prejudice to PAR.

For a prospective Dq Treat franchisee, understanding these obligations is crucial. It highlights the importance of immediately reporting any potential claims to ensure the franchisor can effectively manage the situation and provide the necessary support and protection under the indemnification terms. This also underscores the need for clear communication and cooperation between the franchisee and franchisor in handling legal claims.