What information should be inserted for TIC and delete the above 5(a) in the Embassy Suites Guaranty agreement?

According to the 2025 Embassy Suites Franchise Disclosure Document, when a Tenant-In-Common (TIC) ownership structure is involved, specific language needs to be inserted into the U.S. Guaranty of Franchise Agreement. The FDD indicates that the bracketed language on Exhibit E should be inserted for a site-related guaranty with TIC ownership. Additionally, provision 5(a) in the Guaranty agreement should be deleted and replaced with a modified indemnification clause.

The language to be inserted states: "Guarantor, jointly, severally, individually and collectively, agrees to defend, protect, indemnify and hold harmless, Franchisor from any actions, causes of action, liabilities, damages, losses, and fees (including attorneys' fees) and all other claims of every nature which may arise as a result of any dispute between or among any of Guarantors and any other persons or entities." This clause clarifies the responsibilities of the guarantors in TIC ownership situations, particularly concerning disputes among themselves.

This substitution ensures that Embassy Suites is protected from liabilities arising from internal disputes among the TIC owners. By having this specific clause, Embassy Suites aims to avoid being caught in the middle of disagreements between the owners of the property. The guarantor acknowledges their responsibility to cover any costs or damages resulting from such disputes, providing a safeguard for the franchisor.

For a prospective Embassy Suites franchisee, understanding this clause is crucial if they are considering a TIC ownership structure. It highlights the importance of having a clear agreement among the TIC owners to minimize potential disputes and liabilities. Franchisees should consult with legal counsel to fully understand the implications of this clause and ensure they are adequately protected.