What was a material inducement for Marriott to enter into the Springhill Suites By Marriott agreement?
Springhill_Suites_By_Marriott Franchise · 2025 FDDAnswer from 2025 FDD Document
Without limiting the generality of the foregoing, Franchisee further acknowledges that the covenants set forth in this Paragraph 12 were a material inducement to Marriott to enter into this Agreement, because of the impact of those covenants on the risks (and associated economic consequences) of proceeding with this Agreement.
In order to implement the foregoing acknowledgments, desires and understandings, Franchisee and Marriott for themselves and their respective affiliates and subsidiaries and the current and former officers, directors, shareholders, partners, employees, predecessors, successors, attorneys, agents, representatives, and assigns and all other persons
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, the mutual covenants not to sue were a material inducement for Marriott to enter into the franchise agreement. Springhill Suites By Marriott and the franchisee acknowledge the uncertainty of success under the Programs and desire to avoid litigation that could damage their relationship.
Specifically, the franchisee and Springhill Suites By Marriott agree not to bring any legal action against each other regarding the Shared Services, the Programs, or the Agreement itself. However, Springhill Suites By Marriott retains the right to pursue legal action to collect unpaid Prior Costs or Future Costs as outlined in Paragraph 7.e of the agreement.
This covenant not to sue can be used as a defense against any claim brought in violation of this agreement. The party bringing such a claim is responsible for indemnifying, defending, and holding harmless the beneficiary parties from the claim. This clause highlights the importance of maintaining a positive and collaborative relationship between Springhill Suites By Marriott and its franchisees, and it aims to mitigate potential legal disputes that could arise from the franchise relationship.