Does engaging a Management Company reduce my obligations under the Embassy Suites Franchise Agreement?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
You are solely responsible for the management and operation of your Hotel at all times, regardless of whether you are an individual, corporation, limited liability company, partnership or other entity. Your engagement of a Management Company does not reduce your obligations under the Franchise Agreement. We may communicate directly with your managers and Management
Company, and we have the right to rely on their communications to us as being on made your behalf.
We will not require you or your Management Company to sign an agreement not to compete with us after the Franchise Agreement terminates or expires. However, you may not engage, directly or indirectly, in any cross-marketing or cross-promotion of your Hotel with any other hotel, motel or related business without our prior written consent, except for System Hotels or Network Hotels. You and your Management Company must not copy or disclose any confidential or proprietary materials without our prior written consent.
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.
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, engaging a Management Company to operate your hotel does not reduce your obligations under the Franchise Agreement. While you can hire a Management Company approved by Embassy Suites to handle the hotel's operations, you remain solely responsible for the hotel's management and operation at all times, regardless of your business structure (individual, corporation, LLC, etc.). Embassy Suites retains the right to communicate directly with your managers and the Management Company and will rely on their communications as if they were made on your behalf.
Embassy Suites requires that the Management Company have the authority to perform all of your obligations under the Franchise Agreement, including indemnity and insurance obligations. If the Management Company resigns, is terminated, or is deemed unsuitable by Embassy Suites, you must find a new, acceptable Management Company within 90 days.
Furthermore, Embassy Suites will not require you or your Management Company to sign an agreement not to compete after the Franchise Agreement terminates or expires. However, you and your Management Company are prohibited from engaging in cross-marketing or cross-promotion with other hotels without prior written consent from Embassy Suites, except for System Hotels or Network Hotels. You and your Management Company also must not copy or disclose any confidential or proprietary materials without prior written consent. If your Management Company becomes a Competitor, you will have 90 days to retain a qualified substitute Management Company that Embassy Suites approves.