What is the duration of the Proprietary Software and PEP maintenance provided by HSS for Embassy Suites, and is it renewable?

According to the 2025 Embassy Suites FDD, HSS provides maintenance and support for Proprietary Software and PEP (presumably, a software product) for a term of one year. This maintenance and support commences upon the execution of the agreement. The agreement is renewable annually, but the renewals are at the option of HSS. This means that while an Embassy Suites franchisee can expect an initial term of one year, HSS is not obligated to renew the maintenance agreement beyond that initial period.

This arrangement has important implications for Embassy Suites franchisees. If HSS chooses not to renew the agreement, the franchisee will need to find an alternative provider for software maintenance and support, which could involve additional costs and potential disruptions to their operations. It is important to note that HSS does not provide support for Certified Third Party Software, which is covered separately under agreements with Preferred Providers. Therefore, franchisees need to ensure they have adequate support arrangements in place for all software used in their operations.

Furthermore, HSS retains control over the enhancements, improvements, updates, and modifications to the Proprietary Software and PEP. These updates become HSS's property and are subject to the terms and conditions of the agreement. While HSS will generally make these updates available to customers, franchisees may be required to purchase certain updates or additional hardware and software to utilize major upgrades or enhancements. This could represent an additional cost to the franchisee. Also, HSS reserves the right to increase or decrease the Proprietary Software Maintenance cost on an annual basis to reflect increases or decreases in such costs and the addition or construction of additional guest rooms (or suites) by Customer for Customer's Hotel.

Prospective Embassy Suites franchisees should carefully consider the terms of the software maintenance agreement, including the renewal conditions, the scope of support, and the potential for additional costs associated with updates and upgrades. It would be prudent to discuss these aspects with HSS and existing franchisees to fully understand the long-term implications for their business.