Who has the right to control litigation involving the Hawthorn Suites By Wyndham System?
Hawthorn_Suites_By_Wyndham Franchise · 2025 FDDAnswer from 2025 FDD Document
You will promptly notify us of (i) any adverse or infringing uses of the Marks (or names or symbols confusingly similar), Confidential Information or other System intellectual property, and (ii) any threatened or pending litigation related to the System against (or naming as a party) you or us of which you become aware.
We alone have the right to control any proceeding or litigation involving use of all or any part of the System, including any settlement.
You will cooperate with our efforts to resolve these disputes.
We need not initiate suit against imitators or infringers who do not have a material adverse impact on the Facility, or any other suit or proceeding to enforce or protect the System in a matter we do not believe to be material.
We also have the right to keep all sums obtained in settlement or as a damages award in any proceeding or litigation
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER, AND DISPUTE RESOLUTION (FDD pages 78–83)
What This Means (2025 FDD)
According to Hawthorn Suites By Wyndham's 2025 Franchise Disclosure Document, Hawthorn Suites Franchising, Inc. has the exclusive right to control any legal proceedings or litigation related to the Hawthorn Suites By Wyndham system. This includes the right to manage the litigation and determine any settlement terms.
This means that as a Hawthorn Suites By Wyndham franchisee, you are required to promptly inform the franchisor of any potential or ongoing litigation related to the system that involves you or them. However, you do not have the authority to control the litigation or settlement process. Hawthorn Suites By Wyndham also retains the right to all sums obtained in settlements or damages awarded during litigation, without any obligation to share these with the franchisee.
This arrangement is fairly typical in franchising, as the franchisor has a vested interest in protecting the brand and system standards. By retaining control over litigation, Hawthorn Suites By Wyndham can ensure consistent legal strategies and protect the overall reputation of the brand. However, it also means that franchisees may have limited input on legal decisions that could affect their individual businesses. Franchisees are obligated to cooperate with Hawthorn Suites By Wyndham's efforts to resolve disputes.