For Embassy Suites arbitration actions in Puerto Rico, where will the seat of arbitration be?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
| Provision | Section in Franchise Agreement ("FA"), Spa Amendment and HITS Agreement | Summary |
|---|---|---|
| competent jurisdiction in either Fairfax County, Virginia, or New | ||
| York, New York, but we may elect to bring an action against you | ||
| where the hotel is located. | ||
| For Puerto Rico arbitration actions, the venue will be Fairfax | ||
| County, Virginia, and the seat of the arbitration will be New York, | ||
| New York. An arbitration award may be confirmed in any court | ||
| of competent jurisdiction. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 77–87)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, for arbitration actions in Puerto Rico, the seat of the arbitration will be New York, New York. However, the venue for these actions will be Fairfax County, Virginia. This means that while the arbitration hearings may occur or be managed from New York, the physical location for certain proceedings or the legal jurisdiction overseeing the case will be in Fairfax County, Virginia.
This distinction is important for prospective Embassy Suites franchisees in Puerto Rico because it clarifies where legal actions will be initiated and managed. While the arbitration itself is seated in New York, the venue in Fairfax County, Virginia, suggests that some aspects of the legal process might require attention in Virginia. Franchisees should be aware of this arrangement, as it could impact travel, legal representation, and the overall cost of resolving disputes.
It is fairly common in franchising to designate a specific location for dispute resolution, often the location of the franchisor's headquarters. This clause aims to provide clarity and predictability regarding legal proceedings, but franchisees should carefully consider the implications of having to engage in legal processes potentially far from their primary place of business. Franchisees should consult with legal counsel to fully understand their rights and obligations under the franchise agreement, particularly concerning dispute resolution and choice of venue.