Under what circumstances is Even Hotels obligated to indemnify a franchisee against third-party claims?

According to the 2025 Even Hotels Franchise Disclosure Document, Even Hotels agrees to indemnify, defend, and hold the franchisee harmless from third-party claims and all related losses if those claims arise out of: (a) Even Hotels' material breach of their representations, warranties, or obligations as set forth in the franchise agreement; (b) any claims initiated by Even Hotels' Affiliates or agents asserting rights under the Agreement; or (c) gross negligence or willful misconduct by Even Hotels or their agents. This obligation is subject to a Liability Cap and the Damages Exclusion.

This means that if a third party sues an Even Hotels franchisee due to something Even Hotels did wrong, the franchisor will cover the franchisee's losses, including legal fees and any judgments against them. This protection is limited to situations where Even Hotels is at fault through a breach of contract, actions by their affiliates, or gross negligence/misconduct. The mention of a "Liability Cap and the Damages Exclusion" suggests there are limits to the amount Even Hotels will pay and the types of damages covered.

It is important for a prospective Even Hotels franchisee to understand the specific details of the Liability Cap and Damages Exclusion, as these will define the boundaries of the franchisor's indemnification obligations. Franchisees should consult with a legal professional to fully understand their rights and responsibilities under the indemnification clause and how it interacts with other provisions of the franchise agreement.