During the 'Additional Period', what obligations of the Embassy Suites franchisee must the lender comply with?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
If the default is for failure to comply with physical standards or other non-monetary default which could only be cured by Lender acquiring possession and/or ownership of the Hotel (each, an "Acquisition"), Lender may have an additional period of one hundred eighty (180) calendar days, commencing at the expiration of Lender's Cure Period, for Lender to complete its Acquisition, through foreclosure or other appropriate proceedings ("Additional Period"); provided that Lender must: (i) notify Franchisor no later than the date it commences proceedings (or promptly after action is stayed or enjoined) that Lender wants the Additional Period; (ii) commence proceedings and diligently prosecute such proceedings to completion; and (iii) comply with the obligations of Franchisee under the Franchise Agreement not being performed by Franchisee during the Additional Period including payment of all monetary obligations but excluding those obligations which can only be performed by Franchisee or which Lender cannot perform without possession and/or ownership of the Hotel.
On request by Lender, the Additional Period may be further extended by Franchisor in its determination, which determination shall take into consideration the period of time required to complete an Acquisition in the applicable jurisdiction, and any period of time in which Lender's action has been stayed or enjoined.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, during the Additional Period, a lender may need to take possession or ownership of the hotel to cure a default related to physical standards or other non-monetary issues. To maintain the franchise agreement during this period, the lender must adhere to specific obligations of the franchisee.
Specifically, the lender must notify Embassy Suites that they want the Additional Period no later than when proceedings begin or promptly after any action is stayed or enjoined. The lender is required to commence proceedings and diligently pursue them to completion.
Furthermore, the lender must comply with the obligations of the Embassy Suites franchisee under the Franchise Agreement that the franchisee is not fulfilling. This includes payment of all monetary obligations. However, the lender is not responsible for obligations that only the franchisee can perform or those the lender cannot perform without taking possession or ownership of the hotel. The Additional Period may be extended at Embassy Suites' discretion, considering the time needed for acquisition in the relevant jurisdiction and any periods where the lender's actions are stayed or enjoined.