What is considered a 'Conversion' in the context of an Embassy Suites franchise?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
The Franchise Agreement you sign will provide for new development, conversion, change of ownership, or re-licensing, depending on your situation. These situations are referred to in this Disclosure Document as "New Development," "Conversion," "Change of Ownership," and "Relicensing," respectively. New Development refers to new building construction. Conversion refers to the renovation of an existing building to bring it into compliance with our Brand Standards so that it may operate as a Brand hotel. Change of Ownership refers to the transfer of ownership or control of an existing Brand hotel to a new owner. Re-licensing refers to the grant of a new franchise after the expiration of a prior franchise for the same hotel. Adaptive Reuse is also a category shown on the Franchise Application. It is a form of Conversion.
Source: Item 1 — THE FRANCHISOR AND ANY PARENTS, PREDECESSORS AND AFFILIATES (FDD pages 9–15)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, a 'Conversion' refers to the renovation of an existing building to meet the brand's standards, allowing it to operate as an Embassy Suites hotel. This is one of several situations covered by the Franchise Agreement, along with new development, change of ownership, and re-licensing. Adaptive Reuse is also considered a form of conversion.
For a prospective franchisee, understanding the definition of 'Conversion' is crucial because it dictates the process and requirements for transforming an existing property into an Embassy Suites hotel. This involves bringing the building into compliance with the brand's standards, which may include significant renovations and upgrades.
The FDD specifies that franchisees are required to make future investments to maintain the high standards of the Embassy Suites system. Therefore, franchisees considering a conversion should carefully assess the costs associated with renovating an existing building to meet these standards. This assessment should include not only the initial renovation expenses but also any ongoing investments needed to keep the property aligned with Embassy Suites' brand requirements. Franchisees should also consider Adaptive Reuse as a form of conversion.