Who are the 'Indemnified Parties' that a Sonesta Simply Suites franchisee must indemnify, defend, and hold harmless?
Sonesta_Simply_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
s). You are responsible for paying these taxes promptly and must reimburse us for any such taxes that we must pay to any state taxing authority on account of your operation or payments that you make to us.
- D. Indemnification. You agree to indemnify, defend, and hold harmless us, our parents, subsidiaries and affiliates, and each foregoing entity's current and former owners, shareholders, directors, managers, officers, employees, agents, predecessors, successors, and assignees (the "Indemnified Parties") against, and to reimburse any one or more of the Indemnified Parties for, all claims, obligations, and damages directly or indirectly arising out of: (i) the development or operation of your Hotel, (ii) the
business you conduct under this Agreement, (iii) your breach of this Agreement, and/or (iv) your employment practices or that are instituted by your employees, including those alleged to be caused by the Indemnified Party's negligence, unless (and then only to the extent that) the claims, obligations, or damages are determined to be caused solely by the Indemnified Party's intentional misconduct in a final, unappealable ruling issued by a court with competent jurisdiction. For purposes of this indemnification. "claims" include all obligations, damages (actual, consequential, or otherwise), and costs that any Indemnified Party reasonably incurs in defending any claim against it, including reasonable accountants', arbitrators', attorneys', and expert witness fees, costs of investigation and proof of facts, court costs, travel and living expenses, and other expenses of litigation or alternative dispute resolution, regardless of whether litigation or alternative dispute resolution is commenced. Each Indemnified Party may, it its discretion and at your expense, control the defense of any claim against it (including choosing and retaining its own legal counsel), agree to settlements of claims against it, and take any other remedial, corrective, or other actions in response to such claims. This indemnity will continue in full force and effect subsequent to and notwithstanding this Agreement's expiration or termination. An Indemnified Party need not seek recovery from any insurer or other third party, or otherwise mitigate its losses and expenses, to maintain and recover fully a claim against you under this subparagraph.
Source: Item 22 — CONTRACTS (FDD pages 79–80)
What This Means (2025 FDD)
According to Sonesta Simply Suites's 2025 Franchise Disclosure Document, the franchisee is required to indemnify, defend, and hold harmless certain parties, referred to as the "Indemnified Parties." These parties include Sonesta Simply Suites itself, along with its parents, subsidiaries, and affiliates. The definition extends to each of these entities' current and former owners, shareholders, directors, managers, officers, employees, agents, predecessors, successors, and assignees.
This means that a Sonesta Simply Suites franchisee is financially responsible for protecting these individuals and entities from claims, obligations, and damages that arise directly or indirectly from the franchisee's business operations. This includes costs related to the development or operation of the hotel, the business conducted under the Franchise Agreement, any breach of the agreement by the franchisee, and the franchisee's employment practices. The franchisee is also responsible for covering all costs reasonably incurred in defending against any claim, including accountant, arbitrator, attorney, and expert witness fees, as well as costs of investigation, court costs, and travel expenses.
The franchisee is obligated to cover these costs even if the claims are alleged to be caused by the Indemnified Party's negligence, unless a court determines the damages were solely caused by the Indemnified Party's intentional misconduct. Each Indemnified Party has the right to control the defense of any claim and is not required to seek recovery from any insurer or mitigate losses before seeking indemnification from the franchisee. This obligation to indemnify continues even after the Franchise Agreement expires or terminates.
This indemnification clause is a significant responsibility for Sonesta Simply Suites franchisees. It requires them to bear the financial burden of a wide range of potential claims and liabilities, protecting Sonesta Simply Suites and its related parties from financial loss due to the franchisee's actions or business operations. Franchisees should carefully consider the scope of this indemnification and ensure they have adequate insurance coverage and risk management strategies in place.