What is the franchisee's obligation regarding notifying Embassy Suites of a trademark infringement claim in Minnesota?
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.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, Minnesota franchisees are entitled to indemnification from Embassy Suites against liability to third parties resulting from claims that the franchisee's use of Embassy Suites's trademarks infringes on the trademark rights of a third party. However, this indemnification is conditional.
To be eligible for indemnification, the franchisee must provide notice to Embassy Suites of any such claim and tender the defense of the claim to Embassy Suites within ten (10) days after the claim is asserted. This means that if a franchisee in Minnesota is sued for trademark infringement related to their use of the Embassy Suites trademarks, they must inform Embassy Suites about the claim and offer them the opportunity to defend the claim.
If Embassy Suites accepts the tender of defense, Embassy Suites has the right to manage the defense of the claim. This includes the right to compromise, settle, or otherwise resolve the claim, and to determine whether to appeal a final determination of the claim. This provision ensures that Embassy Suites maintains control over the legal strategy and resolution of trademark infringement claims, which is common in franchising to protect the brand's intellectual property.