What is the definition of 'Assumption Agreement' in the context of the Embassy Suites franchise agreement?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
If Franchisor confirms that Lender is not a Sanctioned Person, Franchisor will promptly prepare Franchisor's then-current form assumption agreement ("Assumption Agreement") to document the Assumption, and deliver the Assumption Agreement to Lender.
Lender must execute and return the Assumption Agreement to Franchisor within ten (10) business days after receipt from Franchisor.
Lender's failure to timely execute and deliver the Assumption Agreement may be deemed a default under the Franchise Agreement entitling Franchisor to terminate the Franchise Agreement.
Any renovation requirements imposed by Franchisor in connection with the Assumption will not exceed those which Franchisor could have imposed had Franchisee remained as the Franchisee under the Franchise Agreement.
In lieu of any transfer or application fee for the Assumption, Lender agrees to pay Franchisor
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, an Assumption Agreement is a document prepared by the franchisor to formalize the assumption of the Franchise Agreement by a lender who has acquired possession and/or ownership of the hotel due to an acquisition. This agreement essentially transfers the franchisee's rights and obligations to the lender.
Within ten business days of receiving a request from Embassy Suites, the lender must provide all necessary information to confirm they are not a Sanctioned Person. If the lender meets this criteria, Embassy Suites will then prepare their current form of the Assumption Agreement and deliver it to the lender. The lender is then required to execute and return the Assumption Agreement within ten business days of receipt.
Failure by the lender to execute and deliver the Assumption Agreement in a timely manner may be considered a default under the Franchise Agreement, potentially leading to termination of the agreement by Embassy Suites. Any renovation requirements imposed by Embassy Suites in connection with the Assumption will not exceed what could have been imposed had the original franchisee remained in control. In lieu of a transfer or application fee for the Assumption, the lender will pay Embassy Suites a processing fee.