What is the definition of a 'Competing Brand' according to Embassy Suites?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
A "Competitor" means any individual or entity that at any time during the Term, whether directly or through an affiliate, owns in whole or in part, or is the licensor or franchisor of, a Competing Brand, irrespective of the number of hotels owned, licensed or franchised by the Competitor under such Competing Brand. A Competitor does not include an individual or entity that: (i) is a franchisee of a Competing Brand; (ii) manages a Competing Brand hotel, so long as the individual or entity is not the exclusive manager of the Competing Brand; or (iii) owns a minority interest in a Competing Brand, so long as neither that individual or entity nor any of its affiliates is an officer, director, or employee of the Competing Brand, or exercises, or has the right to exercise, control over the business decisions of the Competing Brand. A "Competing Brand" means a hotel brand or trade name that, in our sole business judgment, competes with the System or any Network Hotel.
Source: Item 15 — OBLIGATION TO PARTICIPATE IN THE ACTUAL OPERATION OF THE FRANCHISE BUSINESS (FDD pages 74–75)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, a "Competing Brand" is defined as a hotel brand or trade name that, in Embassy Suites's sole business judgment, competes with the Embassy Suites system or any Network Hotel. This definition is important for prospective franchisees because it outlines potential conflicts of interest that could arise if the franchisee or their management company is involved with another hotel brand.
Embassy Suites reserves the right to disapprove a potential franchisee or their management company if they are deemed a "Competitor," which includes owning, in whole or in part, or being the licensor or franchisor of a Competing Brand. However, there are exceptions. An individual or entity is not considered a Competitor if they are a franchisee of a Competing Brand, manage a Competing Brand hotel (as long as they are not the exclusive manager), or own a minority interest in a Competing Brand without holding a position as an officer, director, or employee, or exercising control over the business decisions of the Competing Brand.
This policy aims to protect the Embassy Suites brand and ensure that franchisees are fully committed to the success of their Embassy Suites hotel. It prevents franchisees from dividing their attention or resources between Embassy Suites and a competing brand, which could potentially harm the performance of the Embassy Suites hotel. Franchisees should carefully review this definition and ensure that they do not have any existing or planned affiliations with competing hotel brands that could be considered a conflict of interest by Embassy Suites.