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Joshua M. Bowman published in NEREJ, “The Lakeville Hampton Inn and Morality Clauses”
Joshua M. Bowman, partner and chair of the firm’s Hospitality Practice Group, was published in the New England Real Estate Journal (NEREJ) for his article, “The Lakeville Hampton Inn and Morality Clauses.” This article discusses the franchise agreement between the independently owned and operated Hampton Inn in Lakeville, Minnesota and the Hilton Worldwide system. In January, the Lakeville Hampton Inn refused to let ICE and immigration agents stay at the property, which was inconsistent with Hilton’s standards and policies and resulted in the termination of the franchise agreement by Hilton.
From the article:
“While Hilton did not publicly identify the precise contractual provisions it relied upon to terminate the franchise agreement, the decision was likely based on the standard morality clause contained in every Hilton Worldwide franchise agreement.
From a legal perspective, the Lakeville episode is precisely the type of situation morality clauses are designed to address. There is no evidence that the franchisee failed to maintain specific brand standards, pay franchise fees, or meet well defined operational requirements. Instead, the Lakeville default and termination were likely based on a single franchisee’s decision to place its hotel, and indirectly the Hilton Worldwide system, at the center of a highly charged political dispute.”
