Must an Embassy Suites franchisee comply with the requirements concerning confidentiality of the Manual?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
tions on disclosure to your employees and the use of non-disclosure and non-competition clauses in agreements with your employees, agents and independent contractors who have access to the Proprietary Information.
The Standards, as compiled in the Manual or set out in the Franchise Agreement or otherwise, set forth our requirements and recommended practices and procedures regarding the specifications, requirements, criteria, and policies for design, construction, renovation, refurbishment, appearance, equipping, furnishing, supplying, opening, operating, maintaining, marketing, services, service levels, quality, and quality assurance of System Hotel operations and for hotel identification, advertising and accounting. Although neither we nor HIH, nor any predecessor of either of us, have filed an application for a copyright registration for the Manual, we and HIH claim copyrights and the information is proprietary. You must comply with our requirements concerning confidentiality of the Manual. You may not copy or distribute any part of the Manual to anyone who is not affiliated with the System. You must promptly notify us, in writing, when you learn of any unauthorized use of our Proprietary Information. We will respond as we think appropriate. We are not, however, obligated to participate in your defense or indemnify you for damages or expenses if you are a party to a proceeding involving the copyright on the Manual. Items 11 and 15 of this Disclosure Document further describe the limitations on the use of the Manual by you and your employees.
Although neither HIH nor any predecessor has filed an application for copyright registration for the Hilton OnQ software, which includes OnQ (formerly System 21) and other Hilton systems (namely the Revenue and Customer Relationship Management Systems), HIH claims copyrights and the information is Proprietary Information. You may not copy or distribute any of the OnQ software, and you must notify us of any unauthorized use of the OnQ software or any other Hilton systems.
There are no agreements currently in effect which significantly limit your right to use any of HIH's claimed copyrighted materials. Also, there are no currently effective determinations of the U.S. Patent and Trademark Office, Copyright Office (Library of Congress) or any court pertaining to or affecting any of the claimed copyrights discussed above. Finally, as of the issuance date of this Disclosure Document, neither we nor HIH are aware of any infringing uses of or superior prior rights to any of their claimed copyrights which could materially affect your use of them.
If it becomes advisable at any time in our sole discretion to modify or discontinue the use of any current or future copyright and/or the use of one or more additional or substitute copyrights, you must comply with our instructions. We are not obligated to reimburse you for any costs, expenses or damages.
Source: Item 14 — PATENTS, COPYRIGHTS AND PROPRIETARY INFORMATION (FDD pages 72–74)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, franchisees must comply with the requirements concerning the confidentiality of the Manual. The Manual contains the standards, requirements, and recommended practices for operating an Embassy Suites hotel. Franchisees cannot copy or distribute any part of the Manual to anyone not affiliated with the Embassy Suites system. They must also promptly notify Embassy Suites in writing if they learn of any unauthorized use of the Proprietary Information.
The FDD also states that franchisees must treat the Proprietary Information as confidential and implement reasonable procedures to prevent unauthorized use or disclosure. These procedures include restrictions on disclosure to employees and the use of non-disclosure and non-competition clauses in agreements with employees, agents, and independent contractors who have access to the Proprietary Information.
This means that maintaining the confidentiality of the Manual and other Proprietary Information is a critical obligation for Embassy Suites franchisees. Failure to comply with these requirements could result in a breach of the Franchise Agreement and potential legal consequences. Franchisees should ensure that they have adequate procedures in place to protect this information and that their employees are aware of their confidentiality obligations. This is a fairly standard requirement in franchising, as franchisors need to protect their operating methods and brand standards.