What is the condition for the processing fee to be $5,500 for the Embassy Suites franchise?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
nd Lender.
- (d) Expiration of Franchise Agreement. Nothing in this letter agreement will extend the Franchise Agreement beyond its stated expiration date.
- (e) Receiver Appointment. If a receiver is appointed to operate the Hotel at the request of Lender, Franchisor may require the receiver to enter into Franchisor's the
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, a processing fee of $5,500 is required from the lender in lieu of any transfer or application fee under specific circumstances. This fee applies when a lender assumes the rights and obligations of a franchisee due to acquisition.
Specifically, if the Franchise Agreement does not reference a permitted transfer fee, the processing fee will be Five Thousand Five Hundred Dollars ($5,500). This condition is important for prospective lenders who may take over a franchise, as it clarifies the fees they will be responsible for in the absence of a specified transfer fee within the original agreement.
It is important to note that the lender must also provide all information necessary for Embassy Suites to determine that the Lender is not a Sanctioned Person, and deliver any other documents regarding Lender's ownership structure that Embassy Suites reasonably requests. The lender must execute and return an amendment to the franchise agreement within ten business days after receipt from Embassy Suites, documenting the assumption. Failure to do so constitutes a default under the Franchise Agreement, potentially leading to termination.