What is the definition of 'Sanctioned Persons' according to the Embassy Suites FDD?

According to the 2025 Embassy Suites Franchise Disclosure Document, a "Sanctioned Person" is defined as any individual, organization, or government entity, including those who control such entities or act on their behalf, that is subject to trade restrictions. These restrictions would prohibit or limit the ability of the parties involved to fulfill their obligations under the franchise agreement.

This definition is crucial for prospective Embassy Suites franchisees because it highlights the importance of compliance with international trade laws. Before entering into a franchise agreement, potential franchisees must ensure that they, their controlling individuals, and their business operations are not subject to any trade restrictions that could impede their ability to operate the hotel or fulfill their contractual obligations.

The representations and warranties also extend to the Guarantor, if applicable, ensuring they are not Sanctioned Persons and are compliant with Anti-Corruption Laws. Embassy Suites also requires franchisees to indemnify them against any breaches of these representations, further emphasizing the importance of adhering to these regulations. This protects Embassy Suites from potential legal and financial repercussions associated with doing business with sanctioned entities.

Embassy Suites also includes clauses that allow them to conduct inspections of the franchisee's books and records if they believe there may be non-compliance with these representations and warranties. This proactive approach enables Embassy Suites to monitor and mitigate risks associated with potential violations of trade restrictions and anti-corruption laws, safeguarding the brand's reputation and legal standing.