What entities are considered acceptable Assignees for the Loan transfer regarding Embassy Suites?
Embassy_Suites Franchise · 2025 FDDAnswer from 2025 FDD Document
- (d) any subsequent holder or holders of the Loan ("Assignee") if (1) the Loan is not in default when notice is given; (2) Lender gives notice to Franchisor, identifying Assignee and the new address for notice, within thirty (30) days of the transfer; and (3) the Assignee (i) is a national bank, statechartered bank, commercial bank, investment bank, pension fund, finance company, insurance company, or other financial institution engaged in the business of making loans or any fund managed by any of the foregoing, (ii) is not a Competitor of Franchisor, and (iii) does not own directly or indirectly, any equity interest in Franchisee or its constituent owners; provided, however, that Franchisor may, in its discretion, reject a notice if the Loan is in default when notice is given, or if the notice is not sent by Lender, or if notice is not sent in a timely manner in accordance with this Subparagraph.
On receipt and acceptance of the notice, Franchisor will promptly prepare its then-current form of Assignment and Assumption Agreement ("Assignment") and Lender and Assignee must promptly execute and return the Assignment.
Franchisor may charge a nominal fee for processing the Assignment.
If there is more than one Assignee, the Assignees must (i) designate a single representative to receive notices, negotiate on behalf of and bind each Assignee in connection with this letter agreement and any assignment thereof, and (ii) acknowledge that Franchisor shall be entitled to rely on such designation and deal solely with such representative without the necessity of notifying, negotiating with, or obtaining the consent of, each Assignee.
Source: Item 23 — RECEIPTS (FDD pages 97–305)
What This Means (2025 FDD)
According to Embassy Suites's 2025 Franchise Disclosure Document, an acceptable assignee of the loan must meet specific criteria to be approved by the franchisor. The assignee can be a subsequent holder or holders of the loan. However, several conditions must be met. First, the loan cannot be in default when the notice of assignment is given to Embassy Suites. Second, the lender must provide notice to Embassy Suites within thirty days of the transfer, identifying the assignee and providing their new address for notices.
In addition to the notification requirements, the assignee must also meet certain qualifications. Acceptable assignees include national banks, state-chartered banks, commercial banks, investment banks, pension funds, finance companies, insurance companies, or other financial institutions engaged in the business of making loans, or any fund managed by any of these entities. Furthermore, the assignee cannot be a competitor of Embassy Suites, and they must not own, directly or indirectly, any equity interest in the franchisee or its constituent owners.
Embassy Suites retains the discretion to reject a notice of assignment if the loan is in default, if the lender does not send the notice, or if the notice is not sent in a timely manner. If there is more than one assignee, the assignees must designate a single representative to receive notices and negotiate on their behalf, acknowledging that Embassy Suites is entitled to rely solely on this representative.