What is the exception to the covenant not to sue for Springhill Suites By Marriott franchisees?
Springhill_Suites_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
or entities acting on the behalf or claiming under any of the foregoing, hereby covenant not to bring any suit, action, or proceeding, or make any demand or claim of any type, against each other, or any of the foregoing entities or individuals, with respect to (i) the Shared Services, or (ii) the Programs, or (iii) this Agreement and any action contemplated by this Agreement, except that in the event that Franchisee fails to make payment of Prior Costs or Future Costs in accordance with Paragraph 7.e hereof, Marriott may bring an action for the sole purpose of collecting the payment of Prior Costs and/or Future Costs. Any party intended as a beneficiary of these covenants not to sue may plead or assert this Paragraph 12 as a complete defense and bar to any claim brought in contravention of this Paragraph 12 and, if any such claim is brought, the party asserting the claim shall indemnify, defend, and hold harmless any and all such beneficiary parties from and against any such claim.
Source: Item 17 — , "Renewal, Termination, Transfer, and Dispute Resolution," is amended by the addition of the following paragraph(s) at the conclusion of the Item: (FDD pages 285–553)
What This Means (2025 FDD)
According to the 2025 Springhill Suites By Marriott Franchise Disclosure Document, both the franchisee and Springhill Suites By Marriott agree not to initiate any legal actions against each other regarding the Shared Services, Programs, or the Franchise Agreement. This mutual agreement aims to prevent potentially damaging litigation that could strain their relationship. However, there is a specific exception to this covenant.
Springhill Suites By Marriott retains the right to pursue legal action against a franchisee if the franchisee fails to make payments of Prior Costs or Future Costs as outlined in Paragraph 7.e of the agreement. In such cases, Springhill Suites By Marriott may initiate a lawsuit specifically to collect these outstanding payments.
This exception ensures that Springhill Suites By Marriott can recover due payments without violating the broader covenant not to sue, while the franchisee is protected from litigation related to other aspects of the agreement, promoting a more stable and predictable business relationship.