What is the duration of the Additional Period mentioned in the context of the Embassy Suites franchise agreement?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
Lender shall have the right, but not the obligation, to cure the default within fifteen (15) calendar days beyond the expiration of any cure period given to Franchisee ("Lender's Cure Period").
If the default is for failure to comply with physical standards or other non-monetary default which could only be cured by Lender acquiring possession and/or ownership of the Hotel (each, an "Acquisition"), Lender may have an additional period of one hundred eighty (180) calendar days, commencing at the expiration of Lender's Cure Period, for Lender to complete its Acquisition, through foreclosure or other appropriate proceedings ("Additional Period"); provided that Lender must: (i) notify Franchisor no later than the date it commences proceedings (or promptly after action is stayed or enjoined) that Lender wants the Additional Period; (ii) commence proceedings and diligently prosecute such proceedings to completion; and (iii) comply with the obligations of Franchisee under the Franchise Agreement not being performed by Franchisee during the Additional Period including payment of all monetary obligations but excluding those obligations which can only be performed by Franchisee or which Lender cannot perform without possession and/or ownership of the Hotel.
On request by Lender, the Additional Period may be further extended by Franchisor in its determination, which determination shall take into consideration the period of time required to complete an Acquisition in the applicable jurisdiction, and any period of time in which Lender's action has been stayed or enjoined.
If Franchisor has not issued a default notice to Franchisee or Lender has cured Franchisee's default during Lender's Cure Period and Lender commences a foreclosure or other proceeding intended to result in an Acquisition, Lender may exercise the rights under this letter agreement under the terms and timelines outlined in this Subparagraph.
If Franchisor has not issued a default notice, Lender's notice to Franchisor of Franchisee's default under the Loan will be deemed to initiate the timeline outlined under the Lender's Cure Period and Additional Period.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to the 2025 Embassy Suites Franchise Disclosure Document, a lender may have an "Additional Period" of 180 calendar days to complete the acquisition of a hotel. This period commences after the expiration of the lender's cure period. This applies if the franchisee defaults on physical standards or other non-monetary issues that can only be resolved by the lender taking possession or ownership of the hotel.
To qualify for this extension, the lender must notify Embassy Suites that they want the Additional Period no later than when proceedings begin, or promptly after any action is stayed or enjoined. The lender must also start proceedings and diligently pursue them to completion. Additionally, the lender must fulfill the franchisee's obligations under the Franchise Agreement that the franchisee is not performing during this period. This includes paying all monetary obligations, except for those that only the franchisee can perform or that the lender cannot perform without possessing the hotel.
Embassy Suites may further extend the Additional Period upon the lender's request. This determination considers the time needed to complete an acquisition in the relevant jurisdiction and any time the lender's action has been stayed or legally blocked. If Embassy Suites hasn't issued a default notice or the lender has resolved the franchisee's default during the Lender's Cure Period, the lender can still exercise the rights under this agreement, following the outlined terms and timelines. If Embassy Suites has not issued a default notice, the lender's notification of the franchisee's loan default will initiate the Lender's Cure Period and Additional Period.