How might the boundaries of an Embassy Suites Restricted Area be delineated?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
The boundaries of the Restricted Area will normally depend on the relevant market in the immediate area and competitive circumstances in the relevant market at the time you sign the Franchise Agreement.
The boundaries will vary in size and shape from hotel to hotel.
Boundaries will not be delineated according to any standard formula, but may be delineated in various ways, including references to cities, metropolitan areas, counties or other political subdivisions, references to streets or highways, or references to an area encompassed within a radius of specified distance from the front door of the hotel.
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- Restricted Area Provision.
The Restricted Area Provision will typically restrict us and our affiliates from operating, or authorizing someone else to operate, another Brand hotel during the Restrictive Period and within the Restricted Area (except as described in Paragraph 3 below).
In the Restricted Area Provision, the term 'Brand' means the name used to identify the chain of hotels operated under the same Chain Code and Standards.
It excludes any other brands or product lines containing "Embassy" in the name.
It also excludes Hilton Worldwide Holdings Inc., its affiliates, and other chains of hotels that include the word "Hilton" as part of their brand name (such as "Hilton Garden Inn," "DoubleTree by Hilton" or "Homewood Suites by Hilton").
Source: Item 12 — TERRITORY (FDD pages 67–70)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, the delineation of a Restricted Area is not based on a standard formula and can vary significantly from one hotel to another. The boundaries are determined by the immediate market area and competitive conditions at the time the Franchise Agreement is signed. This means that the size and shape of a franchisee's protected territory can differ based on location and market dynamics.
The FDD specifies that the boundaries of a Restricted Area may be delineated in several ways. These include references to established political subdivisions such as cities, metropolitan areas, or counties. Alternatively, the boundaries could be defined by specific streets or highways. Another method involves setting a radius of a specified distance from the hotel's front door. This flexibility allows Embassy Suites to tailor the Restricted Area to the specific competitive landscape of each franchised hotel.
It's important to note that while Embassy Suites may agree to a Restricted Area, this protection typically lasts for a period shorter than the full term of the Franchise Agreement. Furthermore, the Restricted Area Provision generally restricts Embassy Suites and its affiliates from operating or authorizing another 'Brand' hotel within the Restricted Area during the 'Restrictive Period.' However, the term 'Brand' excludes other brands or product lines containing "Embassy" in the name, as well as other Hilton brands. This means that other Hilton-branded hotels like "Hilton Garden Inn" or "DoubleTree by Hilton" could still be established within the franchisee's Restricted Area.