Who has control over the defense of any action related to the Embassy Suites application subject to the applicant's indemnification?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Applicant, jointly and severally if applicable, agrees to indemnify and defend Hilton Worldwide and the Entities and their respective officers, directors, employees, agents, representatives, and assignees (collectively, the "Hilton Worldwide Indemnitees") against, and to hold them harmless from, all losses in connection with the Application and the Location, including breach of any representations, warranties or undertakings contained herein and all claims, demands, suits, causes of action, liabilities, losses or otherwise, directly or indirectly incurred (including legal and accounting fees and expenses), and including claims as a result of Franchisor processing the Application and/or approving a Franchise Agreement. Each Hilton Worldwide Indemnitee shall have the right independently to take any action it may deem necessary in its sole discretion to protect and defend itself against any threatened action subject to Applicant's indemnification, without regard to the expense, forum or other parties that may be involved. Each Hilton Worldwide Indemnitee shall have sole and exclusive control over the defense of any such action (including the right to be represented by counsel of its choosing) and over the settlement, compromise or other disposition thereof. Hilton Worldwide may rely on any information, statement or notice from the Applicant pertaining to the Location or Franchise Agreement without having to investigate or ascertain the accuracy of any fact or allegation in the information, statement ornotice.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, each Hilton Worldwide Indemnitee has sole and exclusive control over the defense of any action related to the Embassy Suites application, provided that the applicant is subject to indemnification. This includes the right to be represented by counsel of its choosing and control over the settlement, compromise, or other disposition of the action. Hilton Worldwide may rely on any information, statement, or notice from the applicant pertaining to the location or Franchise Agreement without needing to investigate its accuracy.
In practical terms, this means that if a claim or legal action arises related to the application process or the location of the proposed Embassy Suites franchise, and the franchisee is obligated to indemnify Hilton Worldwide, Hilton Worldwide retains complete control over the legal defense. The prospective franchisee will be responsible for covering losses, legal fees, and expenses incurred by Hilton Worldwide and related parties.
This arrangement is generally favorable to the franchisor, as it allows them to manage legal risks and strategies according to their best interests. However, it places a significant financial burden and risk on the franchisee, who may have limited influence over the defense strategy but is still responsible for the costs. Prospective franchisees should carefully consider this indemnification clause and its potential financial implications before entering into a franchise agreement with Embassy Suites.