Are there any limitations on Even Hotels' franchisor's obligation to indemnify the franchisee?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
Hotel will not enter into any settlement or otherwise compromise any Claim where indemnification could be sought under this Section 9.0 (Indemnification) without IHG's prior written consent.
Where an IHG Indemnitee is entitled to indemnification but there is no third party claim, Hotel shall indemnify the IHG Indemnitee and pay all such Losses promptly after receipt of a written demand from IHG.
10.0 DAMAGES.
10.1 Limitation on Types of Damages. To the extent permitted under mandatory Law, no Party will be liable to any other Party for any indirect, consequential, special, incidental, or punitive damages, loss of goodwill, loss of profits, lost
revenue, business interruption, personal injury or property damage or loss, corruption, or unauthorised access to or use of data, even if such damages were foreseeable.
10.2 Limitation on Amounts of Damages. TO THE EXTENT PERMITTED UNDER MANDATORY LAW AND EXCLUDING HOTEL'S BREACH OF SECTIONS 2.2 OR 2.4 OR A BREACH OF SECTION 4.0, NO PARTY SHALL BE LIABLE TO ANY OTHER PARTY UNDER THIS AGREEMENT FOR DAMAGES IN EXCESS OF THE FEES PAID BY HOTEL UNDER THIS AGREEMENT IN THE THREE (3) MONTHS PRECEDING THE EVENT GIVING RISE TO LIABILITY (OR PREDICTED TO BE PAID WITHIN THE FIRST THREE (3) MONTH PERIOD, IF SUCH CLAIM ARISES DURING THE FIRST THREE (3) MONTHS).
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to the 2025 Even Hotels Franchise Disclosure Document, there are limitations to the franchisor's obligation to indemnify the franchisee. Specifically, Even Hotels will not enter into any settlement or compromise any claim where indemnification could be sought without IHG's prior written consent. If an IHG Indemnitee is entitled to indemnification but there is no third-party claim, the Hotel must indemnify the IHG Indemnitee and pay all losses promptly after receiving a written demand from IHG.
Additionally, the agreement stipulates limitations on the types and amounts of damages for which IHG (InterContinental Hotels Group) will be liable. IHG will not be liable for any indirect, consequential, special, incidental, or punitive damages, including loss of goodwill, loss of profits, personal injury, property damage, corruption, or unauthorized access to data, even if such damages were foreseeable. The amount of damages IHG is liable for is capped at the fees paid by the Hotel under the agreement in the three months preceding the event that led to the liability.
These limitations on liability and indemnification are common in franchise agreements. Prospective Even Hotels franchisees should carefully consider these limitations and consult with legal counsel to understand their potential exposure and how these provisions might affect their business operations. Franchisees should also be aware of how state laws, such as those in California, Maryland, Virginia, and Washington, may provide additional protections or supersede certain provisions of the franchise agreement.