What are the criteria for an entity to be considered a 'Competitor' of Embassy Suites?

According to the 2025 Embassy Suites Franchise Disclosure Document, a 'Competitor' is defined as any individual or entity that, at any point during the franchise term, directly or through an affiliate, either owns a part or whole of, or acts as the licensor or franchisor of a Competing Brand, regardless of the number of hotels operating under that Competing Brand. A 'Competing Brand' is further defined as a hotel brand or trade name that, in Embassy Suites's sole business judgment, competes with the Embassy Suites system, any individual Embassy Suites hotel, or any hotel within the Embassy Suites network.

However, the definition of 'Competitor' excludes certain entities. Specifically, an individual or entity is not considered a Competitor if they are merely a franchisee of a Competing Brand, manage a Competing Brand hotel (provided they are not the exclusive manager), or own a minority interest in a Competing Brand. For the minority interest exception to apply, neither the individual/entity nor their affiliates can be an officer, director, or employee of the Competing Brand, provide services to the Competing Brand (even as a consultant), or have the right to exercise control over the business decisions of the Competing Brand.

This definition is important for prospective Embassy Suites franchisees because it outlines the restrictions on their involvement with other hotel brands during the term of their franchise agreement. It prevents franchisees (and their affiliates) from owning or operating competing hotel brands that could directly undermine the Embassy Suites business. The exceptions provide some leeway for franchisees to have limited involvement with other brands, but it's crucial to ensure that such involvement does not constitute control or active participation in the management or operation of a competing brand.