What is the prohibited action for an Even Hotels franchisee regarding settlement of a Claim where indemnification could be sought under Section 9.0?

According to Even Hotels' 2025 Franchise Disclosure Document, a franchisee is prohibited from entering into any settlement or otherwise compromising any Claim where indemnification could be sought under Section 9.0 (Indemnification) without IHG's prior written consent. This condition applies to claims where Even Hotels might seek protection or compensation from IHG due to certain losses or liabilities.

This means that if a third party brings a claim against an Even Hotels franchisee, and the franchisee believes that IHG should cover the costs or damages under the indemnification clause, the franchisee cannot independently settle the claim. They must first obtain written approval from IHG before agreeing to any settlement terms. This provision protects IHG's interests by ensuring they have control over the resolution of claims for which they may be financially responsible.

The requirement for prior written consent gives IHG the ability to assess the claim, evaluate potential liabilities, and participate in settlement negotiations. This is a standard practice in franchising, as it allows the franchisor to maintain brand consistency and protect its financial interests. Failure to obtain IHG's written consent before settling a claim could result in the franchisee being responsible for the full amount of the settlement, even if the claim would otherwise have been covered by the indemnification clause.

For a prospective Even Hotels franchisee, this highlights the importance of understanding the indemnification provisions in the franchise agreement and maintaining open communication with IHG regarding any potential claims. It also underscores the need to seek legal counsel to fully understand the implications of these clauses and the potential financial risks involved.