What actions are Embassy Suites franchisees prohibited from taking with the development incentive money?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
In connection with this Agreement or the performance of its obligations under this Agreement, you will not use any portion of the development incentive to make, provide, offer to make, or authorize, directly or indirectly, an Improper Payment or engage in any acts or transactions otherwise violating any Anti-Corruption Laws. If we have any basis for a reasonable belief that you have used the development incentive in violation of any Anti-Corruption Laws, we will advise you of this belief and you will cooperate with any and all reasonable information and document requests and inquiries, including requests for execution of certificates of compliance, and permit, on reasonable prior notice, at all reasonable times, inspection of the books and records pertaining to the development, ownership, management and use of the Hotel.
Source: Item 22 — CONTRACTS (FDD page 97)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, franchisees are prohibited from using any portion of the development incentive to make or offer Improper Payments, either directly or indirectly, or to engage in actions that violate Anti-Corruption Laws. This restriction is tied to the franchisee's obligations under the franchise agreement.
Embassy Suites retains the right to investigate if it has a reasonable belief that the development incentive has been used in violation of Anti-Corruption Laws. In such cases, the franchisee is obligated to cooperate with information and document requests, including providing certificates of compliance. Additionally, franchisees must allow Embassy Suites to inspect books and records related to the development, ownership, management, and use of the hotel, given reasonable prior notice and at reasonable times.
This condition ensures that Embassy Suites franchisees adhere to legal and ethical standards in their financial dealings related to the hotel's development. It also protects the Embassy Suites brand from potential legal and reputational risks associated with corruption or illegal activities. Prospective franchisees should be aware of these requirements and ensure they have appropriate compliance measures in place.