Who are considered 'Franchisee Indemnified Parties' in the context of a Caption By Hyatt franchise agreement?
Caption_By_Hyatt Franchise · 2025 FDDAnswer from 2025 FDD Document
8.4 Hyatt's Indemnification and Defense of Franchisee.
- (a) Indemnification. Hyatt agrees to indemnify and hold harmless the Franchisee Indemnified Parties against, and to reimburse any one or more of the Franchisee Indemnified Parties for, any and all Losses (including defense costs and other Losses incurred in defending any Proceeding described in Section 8.3(b), if applicable) directly or indirectly arising out of, resulting from, or in connection with (i) a final decision by a court of competent jurisdiction not subject to further appeal that Hyatt, its Affiliate, or any of their respective employees directly engaged in willful misconduct or gross negligence or intentionally caused the property damage or bodily injury that is the subject of the claim with respect to the operation of the Hotel, so long as the claim is not asserted on the basis of (A) theories of vicarious liability (including agency, apparent agency, or joint employer), (B) Hyatt's failure to compel Franchisee to comply with this Agreement, or (C) negligence or misconduct in connection with the development or construction of the Hotel, all of which are claims for which the Franchisee Indemnified Parties are not entitled to indemnification under this Section 8.4; or (ii) any trademark infringement Proceeding disputing Franchisee's authorized use of any Proprietary Mark under this Agreement, provided that Franchisee has timely notified Hyatt of, and complies with Hyatt's directions in responding to, the Proceeding.
Source: Item 22 — Contracts (FDD page 85)
What This Means (2025 FDD)
Based on the 2025 Caption By Hyatt Franchise Disclosure Document, the franchise agreement outlines conditions for both the franchisee and franchisor to indemnify each other under certain circumstances. Specifically, Section 8.4 details Hyatt's commitment to indemnify and defend the 'Franchisee Indemnified Parties' against losses, including defense costs, arising from specific situations.
The 'Franchisee Indemnified Parties' are protected against losses resulting from a court decision that Hyatt, its affiliates, or their employees directly engaged in willful misconduct or gross negligence that intentionally caused property damage or bodily injury related to the hotel's operation. However, this indemnification does not extend to claims based on vicarious liability, Hyatt's failure to enforce the agreement on the franchisee, or negligence/misconduct during the hotel's development or construction. Additionally, the 'Franchisee Indemnified Parties' are indemnified against trademark infringement proceedings related to their authorized use of Caption By Hyatt's proprietary marks, provided they promptly notify Hyatt and comply with their directions in responding to the proceeding.
This section of the FDD is important for prospective Caption By Hyatt franchisees as it clarifies the extent to which Hyatt will provide legal and financial protection in case of specific claims or proceedings. Understanding these indemnification terms is crucial for assessing potential risks and liabilities associated with operating a Caption By Hyatt franchise. Franchisees should carefully review these conditions with legal counsel to fully grasp their rights and obligations under the franchise agreement.