What condition must be met for the Embassy Suites letter agreement to become effective?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
This letter agreement will be effective only when Franchisor receives signatures indicating acceptance by Lender and Franchisee and Franchisor's authorized representative countersigns on the signature page.
If Franchisor does not receive signed copies from Lender and Franchisee within thirty (30) days from the date indicated on the first page of this letter agreement, Franchisor's offer to enter into this letter agreement may be withdrawn.
Once effective, this letter agreement will automatically terminate if (a) Lender no longer has a security interest in Franchisee or the Loan is paid in full, (b) Lender transfers the Loan to another entity unless this letter agreement is assigned in compliance with its terms, (c) Lender materially breaches this letter agreement, (d) Lender has been taken over in any manner by any state or federal agency, (e) Franchisee transfers the Franchise Agreement and the transfer results in a new franchise agreement being entered, or (f) Franchisor terminates the Franchise Agreement in accordance with this letter agreement.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, the letter agreement becomes effective only when specific conditions are met. The agreement requires signatures from the Lender and Franchisee, indicating their acceptance of the terms. Additionally, an authorized representative of Embassy Suites must countersign the signature page.
If Embassy Suites does not receive signed copies from both the Lender and Franchisee within thirty days from the date indicated on the first page of the letter agreement, Embassy Suites has the option to withdraw their offer to enter into the agreement. This thirty-day window is a critical period for the parties involved to ensure they agree to the terms and conditions outlined in the letter agreement.
Once the letter agreement is effective, it will automatically terminate under certain conditions. These include situations such as the Lender no longer having a security interest in the hotel, the loan being paid in full, the Lender transferring the loan to another entity without proper assignment of the agreement, a material breach of the agreement by the Lender, the Lender being taken over by a state or federal agency, the Franchisee transferring the Franchise Agreement resulting in a new agreement, or Embassy Suites terminating the Franchise Agreement according to the terms of the letter agreement. These termination clauses protect the interests of all parties involved and outline the circumstances under which the agreement will no longer be valid.