Under what conditions is an Embassy Suites franchisee NOT required to indemnify an Indemnified Party?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- 14.2 You do not have to indemnify an Indemnified Party to the extent damages otherwise covered under this Section 14 are adjudged by a final, non-appealable judgment of a court of competent jurisdiction to have been solely the result of the gross negligence or willful misconduct of that Indemnified Party, and not any of the acts, errors, omissions, negligence or misconduct of you or anyone related to you or the Hotel.
You may not rely on this exception to your indemnity obligation if the claims were asserted against us or any other Indemnified Party on the basis of theories of imputed or secondary liability, such as vicarious liability, agency, or apparent agency, or our failure to compel you to comply with the provisions of this Agreement, including compliance with Standards, Laws or other requirements.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, a franchisee is not required to indemnify an Indemnified Party if a court of competent jurisdiction issues a final, non-appealable judgment determining that damages otherwise covered under the indemnity agreement were solely the result of the gross negligence or willful misconduct of that Indemnified Party. This exception applies only if the franchisee, or anyone related to them or the hotel, did not contribute to the acts, errors, omissions, negligence, or misconduct that led to the damages. Indemnified Parties include Embassy Suites, its Affiliates, and their respective predecessors, successors, assigns, officers, directors, members, managers, employees, and agents.
However, this exception to the indemnity obligation does not apply if claims are asserted against Embassy Suites or any other Indemnified Party based on theories of imputed or secondary liability. This includes situations involving vicarious liability, agency, apparent agency, or Embassy Suites's failure to compel the franchisee to comply with the provisions of the Franchise Agreement, including adherence to Standards, Laws, or other requirements.
In practical terms, this means that while an Embassy Suites franchisee has some protection against indemnifying the franchisor for the franchisor's own gross negligence or willful misconduct, this protection is limited. The franchisee remains responsible for indemnification in cases where the franchisor's liability is derived from the franchisee's actions or failures to comply with the franchise agreement. This highlights the importance of the franchisee's diligent operation of the hotel and adherence to all standards and legal requirements to minimize potential liabilities.