What page outlines The Standardx's policy on franchisee's indemnification and defense of Hyatt?
The_Standardx Franchise · 2025 FDDAnswer from 2025 FDD Document
8.3 Franchisee's Indemnification and Defense of Hyatt.
(a) Indemnification. In addition to Franchisee's obligation under this Agreement to procure and maintain insurance, Franchisee agrees to indemnify and hold harmless the Hyatt Indemnified Parties against, and to reimburse any one or more of the Hyatt Indemnified Parties for, all Losses directly or indirectly arising out of, resulting from, or in connection with (i) the application Franchisee submitted to Hyatt for the rights granted under this Agreement; (ii) the development or operation of the Hotel, including the use of any Market Descriptor or Hotel IP in connection with the Hotel and any claim or allegation relating to the Accessibility Laws, and including claims alleging either intentional or negligent conduct, acts or omissions by Hyatt or its Affiliates (or any of their agents, employees or representatives) relating to the operation of the Hotel, the F&B Operations, the Spa Operations (if any) or the Hotel System, subject to Section 8.4(a); or (iii) Franchisee's breach of this Agreement.
(b) Defense. Franchisee shall notify Hyatt within five (5) days after receiving notice of any Proceeding covered in Section 8.3(a) naming any Hyatt Indemnified Party as a defendant or potential defendant and shall include with such notification copies of all correspondence or court papers relating to the Proceeding. Franchisee agrees to defend (at Franchisee's expense) the Hyatt Indemnified Parties from and against any and all Proceedings directly or indirectly arising out of, resulting from, or in connection with any matter described in Section 8.3(a)(i) through (iii), including those alleging a Hyatt Indemnified Party's negligence or willful misconduct, subject to Section 8.4(a). Each Hyatt Indemnified Party may at Franchisee's expense defend and control the defense of any Proceeding described in this Section 8.3(b) and agree to settlements and take any other remedial, corrective, or other actions, without limiting Franchisee's obligations under Section 8.3(a), provided that the Hyatt Indemnified Party will seek Franchisee's advice and counsel, and keep Franchisee informed, with regard to any proposed or contemplated settlement.
(c) Separate Counsel and Settlement. If separate counsel is appropriate in Hyatt's opinion because of actual or potential conflicts of interest, Hyatt may retain attorneys and/or independently defend any Proceeding subject to indemnification under this Section 8.3 at Franchisee's sole expense. No party may agree to any settlement in any Proceeding that could have an adverse effect on Hyatt, its Affiliates, the Hotel System, or other franchisees without Hyatt's prior approval.
(d) Right to Control Defense of Certain Proceedings. Without limiting Hyatt's rights or Franchisee's obligations under this Section 8.3, Hyatt (or its designee) has the right to defend and control the defense of any Proceeding arising from any Data Breach or any class action or other Proceeding involving both the Hotel and any other Brand Hotel or Hyatt Network Hotel, regardless of whether Hyatt or any of the other Hyatt Indemnified Parties are named defendants in that Proceeding. Franchisee shall promptly reimburse Hyatt for the Hotel's proportionate share of all reasonable expenses that Hyatt incurs in connection with any Proceeding covered by this Section 8.3(d). Hyatt shall allocate those expenses equitably among the Hotel and all other Brand Hotels and Hyatt Network Hotels involved in the Proceeding in any manner that Hyatt reasonably determines.
Source: Item 18 — OTHER INCOME (LOSS), NET (FDD pages 187–399)
What This Means (2025 FDD)
According to The Standardx's 2025 Franchise Disclosure Document, Article VIII, specifically section 8.3, outlines the franchisee's responsibilities regarding indemnification and defense of Hyatt. This section details the circumstances under which the franchisee must protect Hyatt from losses and legal proceedings.
Specifically, the franchisee is obligated to indemnify Hyatt against losses arising from the application submitted for franchise rights, the development or operation of the hotel (including accessibility law claims and allegations of negligence), and any breach of the franchise agreement by the franchisee. This means that if a third party sues Hyatt for issues related to the franchisee's hotel operation, the franchisee is responsible for covering Hyatt's losses and legal costs.
The franchisee is also required to defend Hyatt in any legal proceedings covered in Section 8.3(a), provided they receive notice and copies of all related documents within five days of the proceeding. Hyatt, however, retains the right to control the defense of certain proceedings, especially those involving data breaches or class action lawsuits affecting multiple hotels within the Hyatt system. In cases where conflicts of interest arise, Hyatt may retain separate counsel at the franchisee's expense.
It is important for prospective The Standardx franchisees to understand the scope of their indemnification and defense obligations, as these can have significant financial implications. Franchisees should carefully review Section 8.3 and seek legal counsel to fully understand their responsibilities and potential liabilities under the franchise agreement.