Under what circumstances must a Surestay Hotel By Best Western customer indemnify AutoClerk?
Surestay_Hotel_By_Best_Western Franchise · 2025 FDDAnswer from 2025 FDD Document
Customer shall indemnify, defend and hold harmless AutoClerk and its Affiliates, and each of its and their respective officers, members, directors, employees, agents, subcontractors, successors and assigns (each, including AutoClerk, an "AutoClerk Indemnitee") from and against any and all Losses incurred by the AutoClerk Indemnitees in connection with any Action by a third party arising out of or related to: (i) Customer Content; (ii) use of the Service by or on behalf of Customer with any hardware, software, system, or service that is neither provided by AutoClerk nor authorized by AutoClerk; (iii) a breach by or on behalf of Customer of any representation, warranty, covenant or obligation under this Agreement; (iv) any gross negligence, misuse or act or omission by or on behalf of Customer with respect to the Service or in connection with this Agreement; or (v) use of the Service by or on behalf of Customer that is outside the use authorized by this Agreement.
- 4.3 Indemnification Procedure.
Each party shall promptly notify the other party in writing of any Action for which that party believes it is entitled to be indemnified.
The party seeking indemnification (the "Indemnitee") shall cooperate with the other party (the "Indemnitor") at the Indemnitor's sole cost and expense.
The Indemnitor shall immediately take control of the defense and investigation of the Action and shall employ counsel of its choice at the Indemnitor's sole cost and expense.
The Indemnitee's failure to perform any obligations under this Section 4 will not relieve the Indemnitor of its obligations except to the extent that the Indemnitor can demonstrate that it has been prejudiced as a result of that failure.
The Indemnitee may participate in the proceedings at its own cost and expense with counsel of its own choosing.
Source: Item 23 — Receipts (FDD pages 88–286)
What This Means (2025 FDD)
According to Surestay Hotel By Best Western's 2025 Franchise Disclosure Document, a franchisee (referred to as 'Customer') is obligated to indemnify, defend, and hold harmless AutoClerk and its affiliates from losses incurred due to third-party actions under specific circumstances. These circumstances are related to the franchisee's actions and use of AutoClerk's services.
The franchisee must indemnify AutoClerk if a third-party action arises from or is related to (i) Customer Content, which refers to the content provided by the franchisee; (ii) the use of AutoClerk's service with hardware, software, systems, or services not provided or authorized by AutoClerk; (iii) a breach of any representation, warranty, covenant, or obligation under the agreement by the franchisee; (iv) any gross negligence, misuse, or act or omission by the franchisee regarding the service or the agreement; or (v) use of the service by the franchisee outside the authorized scope of the agreement.
This indemnification clause means that if a Surestay Hotel By Best Western franchisee's actions lead to a lawsuit or claim against AutoClerk, the franchisee is responsible for covering AutoClerk's losses, including legal fees and damages. This highlights the importance of franchisees adhering to the terms of the agreement, using the service as intended, and ensuring the accuracy and legality of their content and actions related to the service. Franchisees should also be aware of the authorized uses of AutoClerk's services and any integrations with other systems to avoid potential liabilities.
The FDD also outlines procedures for indemnification, requiring each party to promptly notify the other in writing of any action for which indemnification is believed to be warranted. The indemnifying party then takes control of the defense and investigation, employing counsel of its choice. However, the party seeking indemnification is expected to cooperate, and failure to do so may reduce the indemnifier's obligations if prejudice can be demonstrated. The indemnified party can participate in the proceedings at their own expense with their own counsel.