Does the definition of 'transfer' by the franchisee in the Embassy Suites Franchise Agreement include a transfer of an interest in the site on which the hotel is located?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
is strictly a7t y4ou r own risk. We will not be liable for any losses and/or da | m 2 a 0 g 2 es 5 in U co S nn e E cti M on B wi A th S the S u Y se S of U ou I r T we E b S site . | |---|---|
| Provision | Section in Franchise Agreement ("FA"), Spa Amendment and HITS Agreement | Summary |
|---|---|---|
| return all copies of the eforea spa Manual, cancel all assumed | ||
| name or equivalent registrations and transfer any domain name | ||
| listings and registrations that contain any reference to the eforea | ||
| name to us, and cease representing yourself or the hotel as then | ||
| or formerly operating an eforea spa. | ||
| HITS Agreement 4.2 | You must stop using our software and related documents, return | |
| all copies to us, and certify to us that you have done so. | ||
| j. Assignment of contract by us | FA §12.1 | We may assign or transfer the Franchise Agreement and any of our rights, duties or assets to any person or entity without your consent so long as the assignee assumes all of our obligations to permit you to operate the Hotel. |
| HITS Agreement 2.1 | HSS may delegate its operational responsibilities under the | |
| HITS Agreement to third parties but remains responsible. | ||
| k. "Transfer" by you – definition | FA §§1 and 12.2 | Any sale, lease, assignment, spin-off, transfer, or other conveyance of a direct or indirect legal or beneficial interest, including a transfer of an interest the hotel, the Franchise Agreement, the site on which the hotel is located or any direct or indirect Equity Interest (as defined in the Franchise Agreement). You may not transfer to a Competitor or a Sanctioned Person. |
Source: Item 17 — RENEWAL, TERMINATION, TRANSFER AND DISPUTE RESOLUTION (FDD pages 77–87)
What This Means (2025 FDD)
According to Embassy Suites' 2025 Franchise Disclosure Document, the definition of "transfer" by the franchisee includes a transfer of an interest in the site on which the hotel is located.
Specifically, the Franchise Agreement defines "transfer" very broadly. It encompasses any sale, lease, assignment, spin-off, transfer, or other conveyance of a direct or indirect legal or beneficial interest. This broad definition includes not only the hotel itself and the Franchise Agreement, but also the site on which the hotel is located. It extends to any direct or indirect Equity Interest as defined in the Franchise Agreement.
This means that any change in ownership or control, even indirectly, related to the land under the Embassy Suites hotel could be considered a transfer under the agreement. The FDD also specifies that a franchisee may not transfer to a Competitor or a Sanctioned Person.
Furthermore, any transfer of interest in the Hotel, the Hotel Site, or the Franchise Agreement is prohibited unless expressly allowed in the Franchise Agreement. The Franchise Agreement allows Permitted Transfers and Change of Ownership Transfers if certain conditions are satisfied. Permitted Transfers are Transfers that will not result in a change of Control of you, the Hotel, or the Hotel Site.