What is the definition of a 'Competitor' in the context of managing an Embassy Suites franchise?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
In addition, you may not be a Competitor (defined below) and we reserve the right to not approve a Competitor, or any entity that is the exclusive manager for a Competitor through itself or an affiliate, to manage your Hotel. If your Management Company becomes a Competitor, you will have 90 days to retain a qualified substitute Management Company that we approve.
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 "Competitor" is defined as any individual or entity that, at any point during the term of the franchise agreement, directly or through an affiliate, owns in whole or in part, or acts as the licensor or franchisor of a Competing Brand, regardless of the number of hotels they own, license, or franchise under that Competing Brand. A "Competing Brand" is any hotel brand or trade name that Embassy Suites, in its sole business judgment, considers to be in competition with the Embassy Suites system or any Network Hotel.
However, the definition of a "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, as long as they (or their affiliates) are not officers, directors, or employees of the Competing Brand and do not exercise control over the business decisions of the Competing Brand.
Embassy Suites reserves the right to disapprove a Competitor, or any entity that exclusively manages a Competitor, from managing an Embassy Suites Hotel. If a franchisee's Management Company becomes a Competitor, the franchisee has 90 days to find a qualified substitute Management Company that Embassy Suites approves. This policy ensures that the management of an Embassy Suites franchise remains independent of competing hotel brands, safeguarding the brand's interests and standards.