What action is an Embassy Suites franchisee prohibited from taking regarding trademark infringement or dilution without a court order or prior written consent from the franchisor?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Under Minnesota law, Franchisor must indemnify Franchisee against liability to third parties resulting from claims by third parties that Franchisee's use of Franchisor's trademarks infringes trademark rights of the third party. Under Subsection 9.4, Franchisor does not indemnify Franchisee against the consequences of Franchisee's use of Franchisor's trademarks except in accordance with the requirements of the Franchise Agreement, and, as a condition to indemnification, Franchisee must provide notice to Franchisor of any such claim and tender the defense of the claim to Franchisor within ten (10) days after the claim is asserted. If Franchisor accepts the tender of defense, Franchisor has the right to manage the defense of the claim, including the right to compromise, settle or otherwise resolve the claim, and to determine whether to appeal a final determination of the claim.
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- In compliance with Minnesota Rule 2860.4400J, Subsection 9.6.2 of the Franchise Agreement is amended as follows:
The first sentence is amended to read: "If you engage in such non-compliance or unauthorized and/or improper use of the System or the Marks during or after the Term, we and any of our applicable Affiliates, along with the successors and assigns of each, will be entitled to seek both temporary and permanent injunctive relief against you from any court of competent jurisdiction, in addition to all other remedies we and our Affiliates may have at law." The second sentence is deleted in its entirety.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
Based on the 2025 Embassy Suites Franchise Disclosure Document, Minnesota franchisees have specific rights and limitations regarding trademark infringement claims. Under Minnesota law, Embassy Suites is required to indemnify its Minnesota franchisees against liability to third parties resulting from claims that the franchisee's use of the franchisor's trademarks infringes on the trademark rights of a third party.
However, this indemnification is conditional. The franchisee must provide notice to Embassy Suites of any such claim and tender the defense of the claim to the franchisor within ten (10) days after the claim is asserted. If Embassy Suites accepts the defense, it has the right to manage the defense of the claim, including the right to compromise, settle, or otherwise resolve the claim, and to determine whether to appeal a final determination of the claim.
Furthermore, the FDD specifies that if a franchisee engages in non-compliance or unauthorized use of the Embassy Suites system or marks, Embassy Suites and its affiliates are entitled to seek temporary and permanent injunctive relief from a court of competent jurisdiction. This indicates that Embassy Suites can pursue legal action to protect its trademarks if a franchisee misuses them. The Minnesota addendum modifies the franchise agreement to align with Minnesota Rule 2860.4400J regarding injunctive relief.