Regarding third-party claims, what is the Even Hotels franchisee's responsibility concerning notice to AT&T, and what is the consequence of failing to provide timely notice?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
- 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 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, if a third-party claim arises, the franchisee (referred to as the 'party seeking defense or settlement') must promptly notify the other party (AT&T in this case) upon learning of the claim. This requirement is related to seeking defense or settlement of the claim.
The consequence of failing to provide timely notice to AT&T is that it will have no effect except to the extent that AT&T is prejudiced by the delay. This means that if the delay in notification harms AT&T's ability to defend or settle the claim, then the franchisee may face negative repercussions.
In practical terms, an Even Hotels franchisee should immediately inform AT&T of any potential claims to avoid any possibility of prejudicing AT&T's position. This ensures that AT&T has adequate time and opportunity to prepare a defense or negotiate a settlement. The franchisee must also allow AT&T to control the defense and settlement of the claim and reasonably cooperate with the defense. AT&T will use counsel experienced in the subject matter and will not settle a claim without the written consent of the party being defended, unless the relief is limited to monetary damages paid by AT&T.