Under what circumstances is an Even Hotels franchisee required to defend HotelKey, its affiliates, and their personnel against third-party claims?
Even_Hotels Franchise · 2025 FDDAnswer from 2025 FDD Document
Hotel will, at HotelKey's election, defend HotelKey, its Affiliates, and their respective officers, directors, employees, and agents (collectively, "HotelKey Indemnitees") against any and all third-party claims, investigations, lawsuits, proceedings, litigation, and causes of action (collectively "Claims") and Hotel will indemnify and hold the HotelKey Indemnitees harmless from any and all losses, liabilities, penalties, fines, taxes, deficiencies, taxes, interest, expenses, costs, assessments, and damages (collectively, "Losses") arising out of or relating to (a) a breach by Hotel of this Agreement, or (b) PMS Data (including any failure of Hotel to obtain any necessary rights, consents, licenses, permissions, or authorisations relating to the PMS Data).
Hotel will not enter into any settlement or otherwise compromise any Claim where indemnification could be sought under this Section 9.0 (Indemnification) without HotelKey's prior written consent.
Where a HotelKey Indemnitee is entitled to indemnification but there is no third party claim, Hotel shall indemnify the HotelKey Indemnitee and pay all such Losses promptly after receipt of a written demand from HotelKey.
Source: Item 23 — RECEIPTS (FDD pages 99–438)
What This Means (2025 FDD)
According to Even Hotels' 2025 Franchise Disclosure Document, a franchisee is required to defend HotelKey, its affiliates, and their personnel against third-party claims under specific circumstances. The franchisee, referred to as "Hotel" in the document, must defend HotelKey, its affiliates, and their respective officers, directors, employees, and agents (collectively, "HotelKey Indemnitees") against any and all third-party claims, investigations, lawsuits, proceedings, litigation, and causes of action (collectively "Claims").
This obligation arises if the claims and resulting losses are related to (a) a breach of the License Agreement by the Hotel or (b) issues concerning PMS Data, including any failure by the Hotel to secure necessary rights, consents, licenses, permissions, or authorizations related to the PMS Data. The franchisee is also responsible for indemnifying and holding the HotelKey Indemnitees harmless from any and all losses, liabilities, penalties, fines, taxes, deficiencies, taxes, interest, expenses, costs, assessments, and damages (collectively, "Losses") arising from these situations.
The Even Hotels franchisee cannot settle or compromise any claim where indemnification could be sought without obtaining HotelKey's prior written consent. If a HotelKey Indemnitee is entitled to indemnification but there is no third-party claim, the Hotel must indemnify the HotelKey Indemnitee and promptly pay all such Losses after receiving a written demand from HotelKey. This means that Even Hotels franchisees carry a significant responsibility to protect HotelKey from legal and financial repercussions stemming from the franchisee's actions or data handling practices.